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Court Says Second Notice Required When Debt Collectors Sue During Validation Period

February 11, 2010

A federal appeals court recently made a ruling that pleased us greatly as Riverside County fair debt collection attorneys. InsideARM reported Feb. 3 that the Second U.S. Circuit Court of Appeals, the federal appeals court for New York, Connecticut and Vermont, has ruled in favor of more notice to consumers when debt collectors start lawsuits very quickly. In the case, Ellis v. Solomon & Solomon PC (PDF), a collections law firm started its collection efforts against Janet Ellis with the legally required notice that the debtor may dispute the debt within 30 days. About halfway through that 30-day period, the law firm sued the Ellis. She eventually sued it back for violating the Fair Debt Collection Practices Act.

In her lawsuit, Ellis claimed that Solomon and Solomon and two of its attorneys had violated the FDCPA in several ways. However, the appeal focused on whether the law firm misled her when it sued during the 30-day validation period, without providing notice that the validation period was not over. A trial court in Connecticut agreed and ruled for Ellis on that part of the case. The law firm appealed to the Second Circuit, but it too sided with Ellis. Under the law, the court said, new notices must not overshadow or be inconsistent with the original validation notice. Applying a test that takes into account what the "least sophisticated consumer" would think, the appeals court decided that such a consumer might be misled into thinking a lawsuit supersedes the original notice. Thus, the court agreed that the law firm had violated the FDCPA.

As InsideARM noted, this ruling will probably mean that debt collectors who sue during the 30-day validation period have to make it clear that it's still possible to dispute the debt. Our Ontario debt collection harassment attorneys believe this will be valuable for people hit by debt notices. In our experience, most people who receive a debt collection notice don't understand it well, or understand their rights generally. It's not hard to believe that someone without any special legal experience might be confused by a lawsuit that hits halfway into a thirty-day notice. The second notice the court required is a simple solution to this problem that won't cost collection businesses much extra money. And of course, those wishing to avoid a second notice can always wait out the 30 days before suing.

Howard Law PC represents people from all walks of life whose rights have been violated by a debt collector. The FDCPA and similar state laws, such as California's Rosenthal FDCPA, restrict collection agencies from using lies, verbal abuse and other unfair and deceptive practices. Unfortunately, most people don't even realize they have these rights, which allows unscrupulous debt collectors to routinely break the law. Our Temecula unfair debt collection lawyers help people fight back by exercising their right to sue. Under the FDCPA, you can sue for up to $1,000 in statutory damages, plus attorney fees and any actual damages you received, such as the cost of losing a job because of debt collector harassment.

If you're sick of constant phone calls and verbal abuse by debt collectors, you should call Howard Law right away. To set up a free, confidential evaluation of your case, please contact us through the Internet or call 1-800-872-5925 toll-free.