A federal appeals court upheld the dismissal of a putative class action filed by a woman claiming the fine print about contesting debt contained in a collections letter wasn’t enough to inform consumers of their rights.
The U.S. Court of Appeals for the Third Circuit on July 14 sided with a lower court’s decision to toss the case, brought by Alexandra Jewsevskyj, who owed just over $1,000 to a lender.
Jewsevskyj said the small print describing the procedure for contesting the debt, known as the “validation notice,” was overshadowed by the all-caps print of the debt notice, from the prospective of the “least sophisticated debtor.”
However, the Third Circuit in its per curiam ruling said the language was visible and not confusing to the reader.
“Here, although the format is compressed and the font is small, our inquiry focuses on whether the notice is free from language or formatting choices that contradicts or overshadows the notice,” the court’s opinion said. “There is no language that contradicts the notice and the recipient’s right to obtain information about the debt. Moreover, because the notice language is in the same font and format as the rest of the letter, there is nothing more prominent than the notice.”
Cary L. Flitter, who represented Jewsevskyj, and John P. Boyle, who represented defendants Financial Recovery Services, LVNV Funding, Resurgent Capital Services and Allegis Group, did not respond to requests for comment July 14.
The law requires a validation notice to not only appear in a collection letter, but to be noticeable.
Section 1692(g) of the Fair Debt Collection Practices Act provides that a debt collector must alert debtors to their rights within five days of the initial contact.
Additionally, according to the per curiam opinion, the written notice must contain:
“(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 30 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 30-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.
(5) A statement that, upon the consumer’s written request within the 30-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.”