Validation Notice Attached to Foreclosure Action Results in FDCPA Class Action

The Fair Debt Collection Practices Act (FDCPA) mandates that as part of noticing a debt, a debt collector must send the consumer a written notice containing -- along with other information – “the name of the creditor to whom the debt is owed.”   This requirement is sometimes referred to as the “Debt Validation Notice.”  In addition, the Act prohibits a “debt collector” from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
Surprisingly, many well established law firms have a fundamental misunderstanding of the application of this statutory requirement.   A random survey of foreclosure actions filed throughout the State of Florida would reveal that a 1692(g) Validation Notice is routinely attached to mortgage foreclosure complaints.  However, a “pleading,” such as a complaint in a lawsuit, can never be an “initial communication” that triggers the notice requirement under 1692(g).  Moreover, sending such a notice can be deceptive and misleading to the “least sophisticated consumer.”

A recent case filed in United States District Court in Orlando, Florida, alleges that Shapiro, Fishman & Gache, LLP, acting as counsel for PHH Mortgage Corporation, filed a complaint in Seminole County, Florida, to foreclose on Linda Karp’s mortgage and to enforce a promissory note.   Attached to the state court complaint and summons was a document entitled “Notice Required by the FDCPA, 15 U.S.C. Section 1692g.”  The Notice was presumably served to inform Linda Karp of her rights concerning validation of the debt and provide her with 30 days to request validation of the debt.   The summons issued by the court along with the foreclosure complaint informed Karp that she had 20 days to file a response with the court.   Karp sued Shapiro, Fishman & Gache, LLP under the FDCPA alleging that the firm violated the Act because the Notice attached to the state court Complaint was deceptive and misleading to the “least sophisticated consumer.”  The lawsuit alleges that the  “least sophisticated consumer” could be deceived or confused when the summons sets out a 20-day deadline to respond to the lawsuit and the attached notice provides for a 30-day deadline to request validation of the debt.  Karp further alleged that hundreds of other consumers received the identical notice in connection with their mortgage foreclosure lawsuit.
Karp v. Shapiro, Fishman & Gache, LLP, Case Number: 6-14-Civ-Orl-000046-28TB

Validation Notice Attached to Complaint Results in FDCPA Lawsuit

An attempted validation notice pursuant to 15 U.S.C. §1692(g) attached to a Complaint in a lawsuit may be considered as deceptive and misleading to the “least sophisticated consumer” under the Fair Debt Collection Practices Act. In Battle v. Gladstone Law Group, P.A., law firm, acting as counsel for Bank of America, N.A., filed a complaint in Florida State Court to foreclose on Gina Battle’s mortgage and to enforce a promissory note. Attached to the State Court complaint and summons was a document entitled “Notice Required by the Fair Debt Collection Practices Act, 15 U.S.C. Section 1692g.” The Notice was presumably served to inform Gina Battle of her rights concerning validation of the debt and provide her with 30 days to request validation of the debt. The summons issued by the State Court along with the State Court complaint informed Battle that she had 20 days to file a response with the court. Battle sued the law firm, Gladstone Law Group, and attorney Ron Gladstone, under the Fair Debt Collection Practices Act alleging that they violated the FDCPA because the Notice attached to the state court Complaint was deceptive and misleading to the “least sophisticated consumer.” The federal lawsuit was converted into a Class Action alleging that that the class was so large that joinder of all members of the Class was impractical and that the class was in excess of 100. The District Judge ruled that an FDCPA notice incorporated into a mortgage foreclosure summons and complaint, such as the one used by the Gladstone Law Group, does not necessarily effectively convey notice of the rights to the “least sophisticated consumer.” The Court went on to say that the “least sophisticated consumer” could be deceived or confused when the summons sets out a 20-day deadline to respond to the lawsuit and the attached notice provides for a 30-day deadline to request validation of the debt.
Battle v. Gladstone Law Group, P.A., Case Number: 12-14458-Civ-Martinez-Lynch.

Class Action filed againt Udren Law Offices for violations of FDCPA

A class action lawsuit filed in May of 2013 under the Fair Debt Collection Practices Act in United States District Court, Southern District of Florida, against Udren Law Offices, P.C., Courtney Jared Bannan and Mark J. Udren. Case 2:13-cv-14219-DLG. The lawsuit alleges that in connection with the filing of mortgage foreclosure actions, the validation notice stated that the consumer must object to the alleged debt "in writing." This practice has been ruled as a false, misleading and deceptive practice under the Fair Debt Collection Practices Act. See Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 130 S. Ct. 1605, 1634–35 (2010).

Plaintiff, on behalf of herself and other class members, is seeking statutory and emotional damages against Udren Law Offices and has demanded a trial by jury.

[The allegations in the Fair Debt Collection Practices Act lawsuit described in this article are the plaintiff’s version of the facts and must be proven with competent evidence. Moreover, these allegations may be denied or disproven by the defendants.]

Plaintiff accused by Court of deliberately defaulting on debts to create FDCPA claims

The Fair Debt Collection Practice Act (FDCPA), enacted in 1977, aimed to "eliminate abusive debt collection practices.” Among many other reforms, the FDCPA prohibits harassing or oppressive conduct on the part of debt collectors, and it requires debt collectors to provide notice to debtors of their right to require verification of a debt. Both the text of the FDCPA and its legislative history emphasize the intent of Congress to address the previously common and severe problem of abusive debt collection practices and to protect unsophisticated consumers from unscrupulous debt collection tactics. The Act, as a U.S. District court recently stated, was not intended to enable plaintiffs to bring serial lawsuits against different debt collector defendants alleging various and often insignificant deviations from the Act’s provisions.

In Ehrich v. Credit Prot. Ass’n, 2012 U.S. Dist. LEXIS 134142 (E.D.N.Y. Sept. 19, 2012), accused the plaintiff in that case of abusing the FDCPA by, among other things, filing a total of nine complaints, including the present case, over the past seven years. The court stated that the record suggests that the plaintiff may be deliberately defaulting on his debts in order to provoke collection letters which are then combed by his lawyer for technical violations of the FDCPA.

The facts of this unique case are that Ehrich filed a complaint against Credit Protection Association, L.P., alleging violations of the FDCPA. Ehrich alleged that CPA sent him a collection note seeking to recover a debt owed to Time Warner Cable Company. Ehrich did not dispute the validity of the debt CPA sought to collect, nor did he claim that the primary text of the letter violates the FDCPA. Rather, Ehrich based his claim on two Spanish sentences at the top and bottom of the letter.

Printed at the top of the letter is the phrase “aviso importante de cobro,” which Ehrich, relying on a Google translation, translated as “important collection notice.” At the bottom of the collection notice were three Spanish phrases: “Opciones de pago,” “Llame” followed by a phone number, and “Envíe MoneyGram,” which Ehrich translated as “Payment options,” “Call" and “Send MoneyGram.” Ehrich, who does not speak Spanish, claimed that the notice’s inclusion of these Spanish phrases without a Spanish translation of the FDCPA-mandated disclosures and notices provided in English could mislead Spanish-speaking consumers and cause them to inadvertently waive their rights under the FDCPA.

CPA moved for summary judgment which was granted by the court based on lack of standing. The basis for the Court’s ruling was that the collection notice contained all disclosures required by the FDCPA and that Ehrich fully understood it. Therefore, he suffered no injury sufficient to support standing.