In a case of first impression, the U.S. Court of Appeals for the Ninth Circuit has ruled that when multiple debt collectors have attempted to collect on the same debt, each debt collector must send a verification notice.
The case — Hernandez v. Williams Zinman Parham PC — involved plaintiff Maria Hernandez, who had defaulted on a car loan. A succession of debt collectors were involved in trying to collect the outstanding balance of the loan. The plaintiff filed suit against one of the debt collectors, alleging a violation of the Fair Debt Collection Practices Act (FDCPA) because the defendant did not send her a verification notice. The defendant argued that no such notice was required since the plaintiff had received notice from previous debt collectors attempting to collect on the same debt.
Both the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) submitted amicus briefs to the Ninth Circuit, urging the court to hold that the FDCPA does require every debt collector to send a verification notice.
In its July 26, 2016, decision, the Ninth Circuit reversed an Arizona federal court’s finding for the defendant, ruling that if a verification notice was only sent by the first debt collector in a multiple-collector situation, the consumer’s ability to verify and/or dispute a debt would be restricted. The court found that the FDCPA “unambiguously requires any debt collector — first or subsequent — to send a … validation notice within five days of its first communication with a consumer in connection with the collection of any debt.”
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