A Boston federal judge’s ruling in a Fair Debt Collection Practices Act lawsuit against a lawyer underscored a debt collector’s obligation to inform consumers about their rights to dispute the debt.
U.S. District Judge Richard Stearns ruled on Monday that plaintiff Ronnie Pollard may pursue attorney Mandy Spaulding of North Attleboro, Mass, on two claims arising from her efforts to collect $611.84. One is that Spaulding engaged in false, deceptive or misleading representation. The other is that her communiqués improperly played down Pollard’s right to dispute the debt within 30 days.
However, Stearns ruled in Pollard v. Law office of Mandy L. Spaulding that that the attorney did not violate a provision barring a debt collector from harassing, oppressing or abusing a debtor. Of that claim, Stearns wrote, “courts have consistently held that the mere threat of litigation does not give rise to liability.”
Stearns agreed with Pollard that Spaulding’s letter to her contained statements that overshadowed her right to dispute the debt. Specifically, Spaulding warned that she was “not inclined to use further resources attempting to collect this debt before filing suit,” and would “pursue the next logical course of action without delay.”
The judge cited precedents in the U.S. Court of Appeals for the Second Circuit and the Seventh Circuit holding that any demand for immediate payment “must pair that demand with transitional language informing the consumer that the demand does not override the consumer’s right to dispute the debt and seek verification.”
Pollard might have a claim about a false communication, Stearns said. Because Spaulding has failed to disclaim involvement in her capacity as an attorney, she has to show she was “meaningfully involved” in sending the letter to forestall that cause of action.
“Spaulding’s response fails to recognize the long line of cases holding that a letter which purports to be from an attorney violates [that section of the act] if the attorney in fact played no genuine role in the process by which the letter was sent,” Stearns wrote.
The ruling clarifies that consumers have 30 days to dispute the debt, and the debt collector cannot contradict that right by threatening litigation,” said Pollard’s lawyer, Sergei Lemberg of Lemberg & Associates in Stamford, Conn. Previously, he said, there was no First Circuit case law on that point.
In a statement issued through through a spokesman, Spaulding said that she and her counsel were reviewing the ruling.
“The law office of Mandy Spaulding works very hard to comply fully with the [act] and other applicable laws and will continue to strive to do so. Treating consumers with fairness is not only the law, but it’s the right thing to do,” Spaulding said. Morrison Mahoney of Boston represents Spaulding.
Sheri Qualters can be contacted at firstname.lastname@example.org.