If you are an attorney who qualifies as a “debt collector” under the Fair Debt Collection Practices Act, the Ninth Circuit say you must send the so-called “validation notice” required by the FDCPA.
In a case of first impression for the Ninth Circuit, the court held that the phrase “the initial communication” applies to “each debt collector that attempts to collect a debt,” including lawyers who qualify as debt collectors under the statute. The opinion says it’s an issue that has divided district courts and has not been addressed by a published decision of any other circuit.
The court held:
Applying well-established tools of statutory interpretation and construing the language in § 1692g(a) in light of the context and purpose of the FDCPA, we hold that the phrase “the initial communication” refers to the first communication sent by any debt collector, including collectors that contact the debtor after another collector already did. In other words, if there are multiple debt collectors that try to collect a debt, each one must send the required notice after its first communication with the alleged debtor about the debt.
In the underlying case, a debt-collection agency sent the debtor a letter seeking to collect on an automobile loan. When the debtor did not respond to the letter, the debt-collection agency retained a law firm. The law firm then sent a collection letter – its initial communication with the debtor.
The law firm advised the debtor that she could dispute the debt or require additional information from the original creditor, but it did not tell her that she could do so only in writing. In short, the law firm’s collection letter lacked some disclosures required by the FDCPA’s validation-notice provision.
The debtor sued, claiming that the law firm had failed to comply with the FDCPA. The law firm contended it did not need to comply with the validation-notice requirements because the debt-collection agency sent the “initial communication” that triggered them.
The Ninth Circuit concluded that nothing in §1692g(a) “limits its application to only the first debt collector that communicates about a debt.” Finding otherwise would create “loopholes,” according to the opinion:
Viewing the text of §1692g(a) in the context of the FDCPA as a whole makes clear that the validation notice requirement applies to each debt collector that tries to collect a given debt. This interpretation is the only one that is consistent with the rest of the statutory text and that avoids creating substantial loopholes around both §1692g(a)’s validation notice requirement and §1692g(b)’s debt verification requirement—loopholes that otherwise would undermine the very protections the statute provides.
In addition to the substantive issue, the opinion also provides an excellent and succinct primer on federal statutory construction.
Get the court’s opinion here.