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    The Lawletter Blog

    CREDITORS' RIGHTS: Fair Debt Collection Practices Act Disclosure Notice Could Be Given Orally

    Posted by Gale Burns on Tue, Sep 30, 2014 @ 09:09 AM

    The Lawletter Vol 39 No 7

    Alistair Edwards, Senior Attorney, National Legal Research Group

         The Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692–1692p, is a consumer protection statute that protects consumers from unfair, deceptive, and harassing collection practices, while leaving debt collectors free to employ efficient, reasonable, and ethical practices in pursuit of their profession. Among other things, the FDCPA requires a debt collector to give certain notices to the consumer. For example, § 1692g provides:

    (a) Notice of debt; contents

    Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—

    (1) the amount of the debt;

    (2) the name of the creditor to whom the debt is owed;

    (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

    (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

    (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

    15 U.S.C. § 1692g(a).

         Recently, the U.S. District Court for the Northern District of Illinois, in Kasalo v. Trident Asset Management, Case No. 12 C 2900, 2014 WL 3056821 (N.D. Ill. signed July 7, 2014), considered the issue of whether, when the notice required in 15 U.S.C. § 1692g(a) is conveyed in the initial communication, the information contained therein may be oral. Note that the above statute specifically requires written notice five days after the initial communication "unless the following information is contained in the initial communication or the consumer has paid the debt." But what happens when the notice is contained in the initial communication? May this type of notice be given orally? Granted, it may be difficult for the debt collector to effectively provide the required information orally (i.e., "a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector") and for the consumer to understand this oral information, but—as the Kasalo court held—there is nothing prohibiting the collector from orally giving this notice/information (when contained in the initial communication). There, the court indicated that the FDCPA allowed the debt collector to provide orally, during a telephone conversation initiated by the consumer, the notice that the collector was required to give in connection with the initial communication with a consumer. As explained by the court:

         The FDCPA requires a debt collector to "send the consumer a written notice" that contains the amount of the debt owed and the creditor's name. 15 U.S.C. § 1692g(a). The notice must also include statements that the debt will be assumed valid if the consumer does not dispute it within thirty days; that if the consumer disputes the debt within thirty days, the debt collector will obtain verification of the debt or a judgment against the consumer and mail it to the consumer; and that "upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor." Id. §§ 1692g(a)(3)-(5). The notice must be sent "[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt," except in situations where the required information "is contained in the initial communication." Id.

         Another section of the FDCPA addresses required communications between the debt collector and the consumer. It states that a debt collector may not fail to disclose in the initial communication to a consumer that it is trying to collect a debt and that any information it obtains will be used for that purpose. See id. § 1692e(11). The subsection proscribes such a failure "in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial communication." Id.

         Given these statutory provisions, it is fairly clear that a debt collector may convey the required 1692g(a) information to the consumer in the initial communication and that the FDCPA contemplates that the initial communication may be oral.

    Id. at *4-5.

    Topics: legal research, Alistair Edwards, creditor's rights, The Lawletter Vol 39 No 7, Fair Debt Collection Practices Act, consumer protection statute, initial § 1692g information may be oral

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