Consumer Law

Law firm's revised debt-collection letter results in $49.5K settlement of federal class action


A New Jersey law firm and a co-defendant have agreed to pay, and a federal judge on Tuesday approved, a $49,500 class action settlement over the language Mattleman, Weinroth & Miller used in a collection letter.

The Fair Debt Collection Practices Act specifies what must be said in the so-called validation notice that debt collectors, including law firms, are required by the federal statute to send to consumers in their initial notice, points out Joseph Jones, one of the attorneys for the plaintiffs in the case. Although the law firm included what it contended was an equivalent statement to the language required by the FDCPA at 15 U.S.C. §1692g(a)(3), U.S. District Judge Joseph Irenas did not agree, refusing in an earlier ruling to grant a defense motion to dismiss the case, reports the New Jersey Law Journal (sub. req.).

At issue in the Camden, N.J., case was language required by the FDCPA stating that a debt will be presumed valid if it is not disputed by the consumer within 30 days. The firm’s letter, which stated “Should you fail to respond within 30 days, we will recommend that our client commence an action against you to protect its rights,” did not adequately convey the same message to all consumers, the judge ruled.

“The statute tells you what to say,” Jones told the legal publication. “For some reason this firm failed to do it in a series of letters that went out.”

Discovery in the case revealed that the Mattleman firm at one point had a standard debt collection letter including the required FDCPA statement that the debt would be presumed valid if it wasn’t disputed, the article says. However, for some reason the firm revised that language to say only that it would recommend the commencement of an action not long before the letter at issue in the class action was mailed.

The settlement includes $2,500 for the lead plaintiffs, $7,000 for the other plaintiffs (amounting to about $30 each, if none opts out of the settlement) and $40,000 in attorney’s fees.

Lawyers at Mattleman defended the firm in the suit. They did not respond to requests for comment by the New Jersey Law Journal.

Related material:

Federal Trade Commission: Fair Debt Collection Practices Act

Loyola Consumer Law Review: “Documentation? I don’t have to show you any stinkin’ documentation! An evaluation of the verification requirement of 15 USC §1692g(b) “

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