Secondary Debt Collectors Must Give Notice, Judge Says
The fair Debt Collection Practices Act requires subsequent debt collectors to notify consumers in writing, even if the prior holder or debt collector had already given notice, a federal judge has ruled. Deciding an issue that has divided courts, Southern District Judge William Pauley III said secondary collectors still must send a validation notice to avoid confusion by consumers over who holds the debt and whether they have the right to contest it. In Tocco v. Real Time Resolutions, 14-cv-810, Pauley said the requirement of a validation notice in 15 U.S.C. &1692g “applies to initial communications from each successive debt collector.” Under &1692g, once a debt collector has initially contacted the consumer, it must send, within five days, a notice stating the amount of the debt, the name of the creditor and a statement that the debt will be assumed valid if the consumer does not dispute it within 30 days of receiving it. If any portion of the debt is disputed, the collector has to send verification of the debt to the consumer as well as a statement that, at the consumer’s written request, the collector will send the name and address of the original creditor if it is different from the current creditor.