A debt collector's implicit suggestion that a consumer should make a payment before the end of the 30-day dispute period violated the Fair Debt Collection Practices Act (FDCPA), a  federal court in Missouri has ruled.

In Schuller v. AllianceOne Receivables Management, Inc., the debt collector called the debtor within the FDCPA's 30-day dispute period to attempt to set up a payment plan. In response to the debtor's statement that he could not make a payment until the following month, the debt collector's representative indicated that "if nothing's going to take place within this month I have to mark the file accordingly." In a subsequent call initiated by the debtor during the 30-day period, another representative stated that the debt collector looked to immediately resolve an account balance after receiving a debt for collection. In response to the debtor's inquiry about the steps he needed to take regarding the debt and whether the collector wanted immediate payment, the representative indicated that the collector was looking for payment in full "as soon as possible" and confirmed that the collector wanted immediate payment.

The debtor claimed that the conversations violated FDCPA Section 1692g(b) because they constituted a demand for payment by the debt collector that overshadowed his right to dispute the debt. Section 1692g(b) provides that during the 30-day period following a consumer’s receipt of a validation notice during which the consumer can dispute a debt, a debt collector’s  communications ''may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor.''

In granting summary judgment in the debtor's favor, the Court rejected the debt collector's argument that, for overshadowing to occur, a debt collector must make a clear demand for payment within the dispute period. According to the Court, although the representative's language in the first call did not overtly request payment within the dispute period, "it certainly indicates that a payment should be made within that time and failure to do so would be to risk some undefined negative consequences." (emphasis included). In addition, the Court found that the representative's statements in the second call "that payment should be made in full as soon as possible and confirming that the defendant wanted payment 'immediately' … would certainly work to confuse an unsophisticated consumer about whether he could still dispute the alleged debt." Observing that "it seems clear [the debt collector's] representatives were attempting to toe the line between permissible and impermissible collection efforts," the Court concluded that the representatives had nevertheless gone "too far."

The debt collector did, however, win summary judgment on the debtor's claims that the collector violated FDCPA Sections 1692d-f, which prohibit a debt collector from "engaging in any conduct the natural consequence of which is to harass, oppress, or abuse any person" or using "any false, deceptive, or misleading representation or means" or "unfair or unconscionable means" to collect a debt. While observing that the "representatives' behavior may have been persistent," the Court found that it "did not rise to the level of harassing, oppressive, or abusive conduct."

The debtor's claim that it was unfair for the debt collector's representatives not to remind him of his dispute rights during each call also failed, with the Court stating that so long as a written validation notice has been sent, the FDCPA does not require a debt collector to remind the debtor of his dispute rights in subsequent calls.

Attorneys in Ballard Spahr's Consumer Financial Services Group regularly advise clients on compliance with the FDCPA and state debt collection laws and defend clients in FDCPA lawsuits and enforcement matters. The Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).


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