A District Court judge in New Jersey has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act case after it was sued for sending a debt verification letter to a consumer who had refused to pay a debt and demanded the defendant cease communication with him.
The Background: The defendant sent the plaintiff a letter seeking to collect on an unpaid debt. The letter informed the plaintiff that he had 30 days to dispute the debt and that if the plaintiff did dispute the debt, the defendant would cease all collection activity until it sent the plaintiff information that showed he owed the debt.
- The plaintiff responded by sending a letter to the defendant. The letter stated, “Pursuant to 15 USC 1692c(c) I am notifying you in writing that I refuse to pay this alleged debt, and I am demanding that you cease all forms of communication with me through any and all mediums. I do not have the income at this time, therefore I refuse to pay the debt.”
- The defendant responded with a letter verifying the debt. The plaintiff filed suit, accusing the defendant of violating the FDCPA by not honoring his request that the defendant cease communication with him.
The Ruling: While officially ruling that the plaintiff lacked standing to bring this lawsuit because the harms allegedly suffered by the plaintiff were not the kind of harms Congress intended when it enacted the FDCPA, Judge Karen M. Williams of the District Court for the District of New Jersey also took the steps of laying out why the plaintiff’s arguments also failed on the merits.
- Noting that collectors have three exceptions under which they can reply to a cease communication request from a consumer — (1) to advise the consumer that the debt collector’s further efforts are being terminated; (2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or (3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy — Judge Williams determined that the defendant’s response met the criteria for an “implicit” exception in which a collector preserves a creditor’s judicial remedies and ability to recover the debt.
- Because the plaintiff sent his letter within the 30-day dispute window and because he used potentially litigious language by referring to the debt as an “alleged debt,” the defendant was within its rights to send the debt verification letter in order to be able to continue its attempts to collect on the debt, Judge Williams noted.
