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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
One of the industry’s biggest issues with the Model Validation Notice is what to do with additional disclosures that may be needed to satisfy other regulations or laws that govern how debts are collected. A collector is facing a class-action Fair Debt Collection Practices Act lawsuit because it did not include a disclosure in a Model Validation Notice that informed the plaintiff that interest was continuing to accrue on the debt.
The Background: The plaintiff received a Model Validation Notice from the defendant. The itemization table included a line item that informed the plaintiff that he was being charged $3,604.95 in interest, along with other charges and the amount of the debt. The notice also informed the plaintiff that the defendant was attempting to collect on a judgment from 2012.
- The suit claims that since the debt was a judgment, that unless the defendant explicitly writes that it is waiving interest, then interest will continue to accrue. By failing to explicitly inform the plaintiff that interest was accruing on the debt, the plaintiff became confused because the bottom of the itemization table informed the plaintiff that the amount due was the “Total amount of the debt now.” The plaintiff claims the defendant misstated the amount that was owed and that if he had paid that amount, he might not have paid off all of the debt.
The Claim: The suit accuses the defendant of violating Sections 1692e, 1692e(2)(A), 1692e(10), 1692f, and 1692g of the FDCPA.
- The suit also seeks to include anyone else in New York who received a similar notice from the defendant that included an amount of interest accrued since charge-off that was greater than zero and failed to be notified that the debt was subject to further accrual of interest.
