Consumers May Pursue FDCPA Claims Without First Disputing Debt

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The Second Circuit Court of Appeals recently took an important step to ensure that consumers receive the full protection of the Fair Debt Collection Practices Act (FDCPA). The court ruled that a debt collector could not escape responsibility for FDCPA violations simply because the consumer failed to exercise her right to dispute the debt within 30 days of notification.

In Vangorden v. Second Round, Limited Partnership, the plaintiff alleged that Second Round, a debt buyer, had attempted to collect a “current outstanding balance” on a debt she had settled years earlier. She argued that this violated the FDCPA in three ways:

  • Falsely representing the character, amount and legal status of the debt,
  • Using false representations in connection with the collection of a debt, and
  • Attempting to collect a debt amount not expressly authorized by agreement or law

Second Round moved to dismiss the complaint, and the District Court for the Eastern District of New York (EDNY) granted that motion, because Vangorden had received notice of her right to dispute the debt within 30 days and had failed to do so.

In reversing that ruling and allowing the plaintiff’s claim to move forward, the Appellate Court noted that the text of the FDCPA does not make the dispute process a prerequisite to filing an FDCPA case. The court also referenced the purpose of the FDCPA, quoting a past case that described that purpose as:

To ‘eliminate abusive debt collection practices by debt collectors, to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.’

The Second Circuit includes federal district courts in New York, Connecticut, and Vermont. The Third (Delaware, New Jersey and Pennsylvania) and Fourth (Maryland, North Carolina, South Carolina, Virginia, and West Virginia) Circuits had already made similar rulings.

If a debt collector is attempting to collect a debt you don’t owe, is attempting to collect more than you owe, or is using deceptive or abusive practices to collect a debt, you owe it to yourself to learn more about your rights under the FDCPA.

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