Consumers in New Jersey may not know that the Fair Debt Collection Act requires that debt collectors follow certain rules when contacting consumers regarding a debt. Those rules will vary depending on whether the consumer is being contacted for the first time or is in bankruptcy. The act also governs what written communications can say and certain language that must be included.
It is the inclusion of that language that is at the heart of a lawsuit that filed by a consumer in federal court recently. According to court documents, the controversy surrounds a letter received by the woman from a debt collection agency called General Collections. A sentence in the letter said, ‘Unless the debtor disputes the debt within 30 days after receipt of the notice, it will be assumed that the debt is valid.’ The woman took that language to mean that if she failed to dispute the debt within 30 days that she was forever barred from disputing the debt — even in court.
Under the Fair Debt Collection Act, written communications used to validate a debt must specify that the debt will only be considered valid by the debt collection agency. The consumer will still have the right to dispute the debt in court and attempt to have it discharged in bankruptcy. The ambiguity of the language is in violation of the act, so the woman sued. She is hoping to be granted class action status since she is most likely not the only person that received a letter with the incorrect language.
Many people in New Jersey are subjected to practices from debt collection agencies that may not exactly be in compliance with the act. Even when a consumer files bankruptcy, some debt collectors will still attempt to collect a debt, which is also a violation of the U.S. Bankruptcy Code. Lawsuits such as the one filed by this woman may help to remind debt collection agencies that they do have to work within certain guidelines.
Source: omaha.com, “Class-action status eyed against Nebraska debt collector,” Russell Hubbard, June 23, 2013