Solutions to the Collection Letter Pop Quiz

Editor’s Note: We recently published a Collection Letter Pop Quiz and asked readers to spot possible violations in sample collection letters provided by Rozanne Andersen. Below are the answers to the quiz. How did you do? Are there any we missed?

Mouse-over the highlighted areas to see the possible FDCPA violations in the sample debt collection letters below.

Letter #1

COLLECTION LAW FIRM, Ltd.
P.O. Box 1234
Anytown, State 56789

Re: Acct #: 122233344
Amount Owed: $1050.00
Original Creditor: ACME, Inc.

To call Pay Today Collection Agency
1-800-PAY-TODY Ext. 669

Dwight K.Schrute
0000 Mockingbird Lane
New York, NY 18888

July 15, 2009

Dear Dwight Schrute,

Collection Law Firm, LTD. Is a debt collector attempting to collect a debt and any information obtained will be used for that purpose. Pay Today Collection Agency (“Pay Today”) has retained Collection law Firm, Ltd. To collect from you the entire current balance for the above referenced account. Within one week of the date of this letter, either remit the balance due to Pay Today or phone Pay Today directly at 1-800-PAY-TODY Ext. 669 to make payment arrangements. Please use 122233344 as your reference number. Collection Law Firm, Ltd. Is entitled to file a lawsuit against you for the collection of this debt when the week is over.

Unless you notify this office within thirty (30) days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within thirty (30) days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor if different form the current creditor.

The law does not require us to wait until the end of the 30-day period before suing you to collect this debt. If you request proof of the debt or the name and address of the original creditor within the 30-day period, the law requires us to suspend our efforts to collect the debt (through litigation or otherwise) until we mail the requested information to you

Sincerely,

Collection Law firm, Ltd.

Letter #2

October 2, 2010

Katherine Schrute
1234 Avenue Road
Phoenix, AZ 00000

Lender: Extremely Well Known Credit Card Company
Account Number: 12345
Balance: $7,305.44

As you are now aware, this company has purchased your obligation originated with the above named Credit Card Company.

If you do not contact us by Friday, October 6, 2010, to arrange for settlement, we will file a lawsuit against you for breach of contract.

If the court issues a judgment against you, we will record this judgment lien at the county auditor’s office and attempt to garnish your wages and/or bank accounts. Recording this judgment will effective lien any real property you own in this county.

If you call us by the date listed above, we will provide you a 25% discount on the amount you owe as stated above.

THIS LETTER IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.

Sincerely,

Bob Schmidt, Member managers
ABC Collection Agency

Letter #3

ABC Collection Agency
0000 Way, Suite 10
Monday – Friday 8 a.m. to 5 p.m. PST
P.O. Box 1234
Spokane, WA 00000

Toll Free: (8888) 123-1234 or (123) 123-1234

January 21, 2009

DIS-#002344-1

Mr. Schrute
Mrs. Schrute
1234 Zero Avenue
Everett, TX 99999

Re: Original Creditor: Very Well Known Credit Card Company
Placed for collection on 6/28/95

Principal Due: $5,000
Interest Due: 173.53
Total Due: $6692.57

Dear Mrs. Schrute:

Our office has received your dispute as to the validity of the debt deta8iled above. ABC Collection Agency’s compliance department has reviewed your dispute and the underlying debt and has determined that the debt is accurate as reported. If you have questions regarding this issue please contact our office directly and we will be happy to discuss the details of your dispute and the related debt.

Sincerely,

Compliance Officer
ABC Collection Agency

This communication is from a debt collector is an attempt to collect a debt and any information obtained will be used for that purpose. Your account will accrue interest at a rate of 012.00 percent per annum.

Is the law firm selling its letterhead to create a false sense of urgency. If so, this is an FDCPA violation.

The account debtor is in New York City and there is no New York City debt collector license number listed on this notice.

The name of this agency is inherently problematic. The name overshadows the consumer’s right to dispute the debt or request validation within 30 days.

This letter creates confusion over which third party debt collector is collecting this debt. The first sentence of the letter suggests it is the law firm but this reference to Pay today Collection Agency creates confusion.

This statement overshadows the 30 day dispute period.

Unless Collection Law Firm has been authorized to file suit as stated in this letter, it cannot suggest it will file suit. The word entitled is confusing and should be replaced with will file a lawsuit or may file a lawsuit depending upon the authority it has been given by the creditor.

The validation notice cannot be in a font size smaller than the other portions of the letter. Though not a strict requirement, it is typically printed in bold face type.

In New York the letter must contain the name of the person the consumer can call to discuss the debt.

It appears this is the second collection notice because of the reference to “As you are aware…”

The consumer has other remedies. This statement is false because it limits the consumer’s options to one of these two.

The firm must have the authority to initiate suit and must have made the decision to initiate suit based upon the meaningful involvement of the attorney as a condition of making this statement.

This statement implies the court will enter judgment against the consumer and also suggests penalties that may not be awarded. In addition, wages may be exempt.

This letter appears to be from a collection agency and these post judgment remedies can only be performed by an attorney.

This statement can only be made if the firm has the authority to settle the debt for this amount and the intent to settle the debt at this discount.

There are actually two dates listed above. I cannot be sure this letter was indeed mailed on October 2.

This language should be in bold face type. It is only appropriate if this is the second collection notice from this agency. If sent during the validation notice period, this letter overshadows the validation notice letter in violation of the law.

The total is incorrect and therefore an attempt to collect amounts not owed.

Illegal communication and also a merger of an FCRA concept and an FDCPA concept.

Since this letter presents as a collection notice rather than a response to an FCRA dispute, this is an unlawful response. The agency must either provide the consumer with verification of the debt or cease collection.

If this agency is also credit reporting this debt it must now promptly update the account as disputed.

Same as comment above.

The time period within which this letter was sent to the consumer is important. If the consumer already disputed the debt during the validation period, verification of the debt must be provided. If outside the 30 day period, verification is required by some associations’ codes of ethics but not by the FDCPA. If this letter is required by the FCRA in response to the consumer’s dispute the agency must be licensed in Texas.

This statement should not be buried in the mini Miranda disclosure statement in states that require itemization of amount owed.