Subsequent debt collectors must send FDCPA validation notice, Ninth Circuit rules

by Ballard Spahr LLP
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The Ninth Circuit has ruled that the FDCPA requirement in 15 U.S.C. §1692g(a) for “a debt collector” to send a validation notice either in “the initial communication” or “[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt” not only applies to the first debt collector that contacts a consumer to collect a particular debt,  but also applies to subsequent debt collectors that communicate with the consumer about the same debt.

The CFPB, together with the FTC, filed an amicus brief in support of the plaintiff.  However, the Ninth Circuit found that it was unnecessary for it consider whether the agencies’ interpretation was entitled to deference.  It commented that “[b]ecause application of the tools of statutory construction yields a clear answer to the question presented in this case, our inquiry is at an end without consideration of the interpretation advanced by the [CFPB] and the [FTC].”

The plaintiff in the case claimed that the letter she received from the defendant, a debt collection law firm, containing the validation notice violated the FDCPA because the notice did not include all required information.  The defendant argued that it was not subject to the FDCPA validation notice requirement because its letter was not the “initial communication” the plaintiff received about the debt.  According to the defendant, because the debtor had previously received a validation notice complying with the FDCPA from another debt collector, the defendant was a subsequent debt collector that had no obligation to comply with the validation notice requirement.

The district court granted summary judgment to the defendant, concluding that the validation notice requirement did not apply to the defendant’s letter because it was not the initial communication that the plaintiff had received about the debt.  According to the district court, the FDCPA’s plain text contemplated only one initial communication with a debtor on a given debt, meaning the initial communication from the initial debt collector.

FDCPA 1692g(a) provides that “within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing [the information specified].”  In reversing the district court, the Ninth Circuit found the text of §1692g(a) to be ambiguous because nothing in the provision limited its application to only the first debt collector or clarified whether ‘the initial communication’ referred to the first communication ever sent about the debt or the first communication sent by each and every debt collector seeking to collect it.

However, the Ninth Circuit found that an examination of “the full text of the FDCPA reveals that Congress used the phrase “a debt collector” throughout the statute to impose obligations and restrictions on all debt collectors throughout the entire debt collection process.”  The Ninth Circuit also concluded that interpreting “the initial communication” to refer to the first communication by any debt collector was “more in keeping with the FDCPA’s declared purpose of protection consumers from abusive debt collection practices.”

The Ninth Circuit also stated that it was unnecessary “to resort to external sources to interpret §1692g(a)” because “Congress’s intent to require each debt collector to send a validation notice with its initial communication is clear from the statutory text.”  Nevertheless, the court observed that even if any ambiguity remained, the legislative history “extinguishes any doubt that Congress intended the validation notice to protect consumers throughout the entire lifecycle of a debt.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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