Pittsburgh Legal Back Talk

Legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus.

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Posted By Cliff Tuttle | May 18, 2010

The Fair Debt Collections Practices Act (FDCPA) requires a debt collector, under Section 1692 g(a)(3), to send the consumer a written notice within 5 days following an initial communication regarding the debt “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.”

Such a notice was attached to the Complaint in a mortgage foreclosure action filed in Ohio by Countrywide Home Loans, Inc. against Karen L. Jerman.  However, the notice stated that the debt would be assumed to be valid unless Jerman disputed it in writing. Jerman’s attorney sent a letter disputing the debt and Countrywide acknowledged payment and withdrew the action.

But that was not the end of the matter.  Jerman sued the attorneys who filed the foreclosure contasining the incorrect FDCPA warning, asserting a violation of Section 1692e (2)(A), prohibiting false representations as to the debt’s character, amount or legal status.

The defense: Section 1692 k(c), providing that a debt collector is not liable if “the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.”

The issue presented is whether the debt collecting law firm that made an erroneous statement to the debtor that she must dispute the debt in writing under FDCPA, is excused from liability under the bona fide error rule.

On April 21, 2010, Justice Sonya Sotomayor, writing for the majority, concluded that an bona-fide error of fact could be excused under the statute, but not an error of law. See Jurman v. Carlisle, 538 F. 3d 469.  In addition to Justice Sotomayor’s opinion, Justices Breyer and Scalia filed concurring opinions and Justice Kennedy dissented with Justice Alito joining in the dissent.

The immediate lesson here is that when mandate to give a notice, you should give the mandated notice — no more, no less.  Don’t say “in writing” when the prescribed statutory notice doesn’t.

But the real question is: where is this going?  Does this rule apply to averments in the Complaint?  If so, what kind of averments that turn out to be  mistakes of law will bring liability upon a debt collector?  Must we disclose defenses? Does failure to do so constitute mischaracterization of the legal status of the debt?  For example, what do you do if you know that the statute of limitations has run? Not sue at all?



CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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