A District Court judge in New York has granted a defendant’s motion to dismiss on most of the claims that it violated the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Truth-in-Lending Act, but denied it on one FDCPA because the defendant purportedly did not properly respond to a verification request from the plaintiff.
A copy of the ruling in the case of Alausa v. Monterey Financial Services can be accessed by clicking here.
The plaintiffs allegedly signed a timeshare contract while on vacation and attempted to cancel it the next day. They had been told they had up to seven days to cancel the contract. Six months later, the plaintiffs started seeing charges on their credit cards from the timeshare company and again attempted to cancel the contract. The plaintiffs later discovered a tradeline on their credit reports from the defendant, related to the timeshare account. The plaintiffs sent the defendant a notarized letter requesting validation of the debt. The defendant sent a response two days later confirming receipt of the plaintiffs’ letter and stating that it would submit a request to remove all derogatory marks against their credit, which never happened.
The plaintiffs filed suit, accusing the defendants of violating TILA and the FCRA by not submitting accurate information to the credit reporting agencies. The plaintiffs also accused the defendant of violating several provisions of the FDCPA.
Judge Pamela K. Chen of the District Court for the Eastern District of New York made short work of the TILA and FCRA claims, granting the defendant’s motion to dismiss. And on most of the FDCPA claims made by the plaintiffs, Judge Chen also found for the defendant. Except on the claim that it violated Section 1692g by not validating the debt.
While the complaint does not refer to an initial communication that the plaintiffs may have received from the defendant, Judge Chen said it was “reasonable to infer” that the defendant sent an initial communication or validation notice and that’s what triggered the validation request from the plaintiffs. The defendant subsequently acknowledged receipt of the request and indicated it was taking action, yet the plaintiffs never received the validation they requested. The defendant argued the plaintiffs’ pleadings were insufficient and the FDCPA’s statute of limitations had expired, but Judge Chen ruled that the plaintiffs had alleged enough facts sufficient to state a claim under 1692g.
