A District Court judge in New Jersey has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class action involving an undated Model Validation Notice on most of the claims, but denied the motion regarding a claim that the MVN violated Section 1692g(a) of the statute because a least sophisticated debtor would be “unable to determine whether the amount of the Debt owed was still accurate as of the date they received the letter.”
The Background: The plaintiff received an undated Model Validation Notice in January 2022. The notice stated that “as of 4/18/2021” the plaintiff owed $10,458.33. The letter indicated that between 4/18/2021 and “today,” $0.00 in interest and fees had been added to the balance and that $0.00 in payments had been made.
- The plaintiff filed suit in New Jersey state court, accusing the defendant of violating the FDCPA and Regulation F by not dating the MVN. The plaintiff claimed not to know whether $10,458.33 was the current total as of the date he received the letter and could not ascertain to what date “now” and “today” referred to in the MVN. The suit accused the defendant of violating Sections 1692d, 1692e, 1692e(2)(A), 1692e(5), 1692e(10), 1692f, 1692g(a) and 1692g(b) of the FDCPA.
- The defendant removed the case to federal court and filed the motion to dismiss. It argued the suit should be dismissed because the plaintiff failed to state a claim upon which relief could be granted because the complaint failed to show the notice violated any provision of the FDCPA, because the defendant complied with the FDCPA, because the defendant was entitled to the safe harbor under Regulation F for mirroring the CFPB’s Model Validation Notice, and because another federal court dismissed the same claim against the defendant in a nearly identical suit filed in California.
The Ruling: Judge Brian R. Martinotti of the District Court for the District of New Jersey granted the motion to dismiss on every claim but one, the 1692g(a) claim. So let’s focus on that.
- Judge Martinotti ruled the Reg F safe harbor did not apply because it only protects collectors against violations with respect to Reg F and not violations of the FDCPA. The CFPB never indicated that using its Model Validation Notice satisfied the collector’s requirements under the FDCPA, the judge noted.
- Section 1692g(a) of the FDCPA requires collectors to include the amount of the debt in their validation notices. Using the details of the Model Validation Notice, a least sophisticated debtor “would be unable to determine whether the amount of the Debt owed was still accurate as of the date they received the Letter and/or whether, and by how much, the Debt could or would increase, whether through interest or fees or otherwise, absent prompt payment,” Judge Martinotti wrote.
- The omission of the date created confusion and the notice provided no means by which the plaintiff might assess whether, and by how much, the debt might increase in the future if he did not promptly pay the defendant.
