Opinion ID: 2633696
Heading Depth: 1
Heading Rank: 5

Heading: MAB's Debt Collection Communication Violates Colorado's Statute

Text: In this case, MAB's debt collection communication contains two apparent contradictions likely to confuse the consumer. First, the letter portion of the communication encourages Flood to contact MAB orally, while the required validation noticewhich states that Flood must contact MAB in writing to take advantage of her rights under the Colorado Actis buried in the fine print appended to the bottom of the communication. This structure is likely to confuse the least sophisticated consumer about the necessary means of communicating with MAB in order to dispute the debt. Second, the conflicting deadlines contained in the communication further cloud the consumer's understanding of her legal rights under the Colorado statute. On the one hand, the consumer is presented with a date certain of August 21, 2004thirty-nine days from the date of the communicationto take advantage of MAB's settlement offer. On the other hand, the consumer is informed that she has thirty days from receiving the communication to dispute in writing the validity of the debt. The letter portion of the communication is two short paragraphs and appears to bear the signature of a real person: Your account with CITI FINANCIAL-TRANSOUTH has been listed with our office for collection. The balance due is $5604.45. If you don't agree with the balance it is important that you contact our office to discuss this matter. Please be advised that our client has authorized us to offer you substantial savings to settle this account. We will accept $2522.00 if payment is received by 08-21-04. Contact our office for more information. Respectfully, J. Dial Mercantile Adjustment Bureau, LLC P.O. Box 9315A Rochester, N.Y. 14604 1-877-230-8414 Thus, the letter portion of the communication is cordial and encouraging. It purports to contain J. Dial's phone number. It underscores the importance of picking up the phone to discuss this matter if you don't agree with the balance. It promises to cut the asserted debt in half if payment is received by August 21, 2004thirty-nine days from the communication's date. However, the letter portion of the communication does not clearly state that the recipient is entitled to have proof that she actually owes the asserted debt. Nor does it state that the recipient loses this right if she fails to dispute in writing all or any portion of the debt within thirty days of receiving the communication. To the contrary, the letter portion of the communication invites a phone call as the only necessary means for disputing the debt and it sets forth no deadline for making this phone call. The letter portion of the communication ends with the closing Respectfully. This closing is clearly intended to convey that the writer is dedicated to protecting all of the recipient's rights in the matter. Furthermore, J. Dial is a fictitious person, and only the smaller print below the letter portion of the communication refers to the thirty day written notice provision upon which the statutory rights of the letter recipient turn. The rest of the debt collection communication below the signature block of the letter portion states: THERE WILL BE A $20.00 FEE ADDED ON ALL RETURNED CHECKS. THIS COMMUNICATION IS FROM A DEBT COLLECTOR THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. Unless you notify this office within 30 days after receiving this notice that you dispute the validity of the debt or any portion thereof, this office will assume the debt is valid. If you notify this office in writing within 30 days from receiving this notice, 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 from the current creditor. FOR MORE INFORMATION ABOUT THE COLORADO FAIR DEBT COLLECTION ACT VISIT WWW.AGO. STATE.CO.US/CAB.HTM. Pick up the phone and let's talk, you really don't need to write is plainly the tone and content of the letter portion of the communication. The gullible, unwary, trustful, or cowed recipientthe least sophisticated consumercan easily rely only on this section of the communication to his or her detriment. J. Dial clearly appears to be speaking on behalf of MAB for everything above the signature line, including the apparent representation that one can effectively dispute the debt orally for all purposes. If the recipient reads down to the printed material below J. Dial's signature, the import of the smaller print is veiled, confused, contradictory, and overshadowed by the letter portion of the communication. In addition, the only date mentioned in the letter portion of the communication is the date for taking advantage of the half-payment offerAugust 21, 2004, thirty-nine days from the date of the communication. If a consumer receiving the communication waited until the end of the thirty-nine day period to make a written request for verification of the debt, he or she would be beyond the thirty day period for invoking this right in writing. We conclude that MAB's communication to Flood did not comply with Colorado's statute; the county court and district court erred in concluding otherwise. In the letter portion of the communication, MAB prominently and expressly encouraged Flood to contact it by phone if she had any issue with the alleged debt, and it made an offer to settle the matter. Our decision today does not prohibit or penalize a collection agency from inviting oral communication or making a settlement offer. Such invitations may aid the consumer, and the statute allows them. However, when these invitations are made, the collection agency must prominently alert the consumer: (1) of his or her right to documentation verifying the amount of the debt and that the consumer actually owes the debt, and (2) that the consumer must make a written request for verification within thirty days of receiving the communication or else lose this right. This is what the General Assembly clearly intends for the notices contained in section 12-14-109 to accomplish. The peculiar wording of the debt collection communication in this case leads the least sophisticated consumer into believing that oral communication alone will suffice to trigger all of her rights under the statute. In the personalized letter portion inviting oral communication, there is no prominently displayed message of her right under sections 12-14-109(1)(d) and -109(2) to receive verification of the debt from MAB and explaining that this right would be lost if she did not dispute the debt in whole or part by writing within thirty days of receiving the communication. This debt collection communication as a whole is confusing, contradictory, and misleading in light of the message contained in the letter portion of the communication. The extended time for taking advantage of the settlement offercouched within a personalized assurance that all her rights will be preserved through oral communicationeffectively misleads the consumer into delaying the transmission of the consumer's written request for the verifying documentation, thereby causing the loss of valuable consumer rights. The overarching purpose of the Colorado statute is to prevent and remedy deceptive and abusive debt collection practices. See §§ 12-14-106 to -108 (forbidding harassing, abusive, misleading, and unfair debt collection practices). While the statute provides that the collection agency may make the required section 12-14-109 disclosures on the back of the notice if the front of the notice contains a statement notifying consumers of that fact, see § 12-14-109(1), the statute does not authorize the collection agency to couch, conceal, veil, contradict, or minimize the required disclosures so as to confuse or mislead the consumer into foregoing her rights. When a consumer disputes in writing the alleged debt in whole or in part, the agency must cease further debt collection efforts while it gathers and supplies verifying proof of the debt to the consumer, pursuant to section 12-14-109(2). [5] The General Assembly intended that these verification-of-debt and cessation-of-debt-collection rights be a functioning part of the statute. The consumer's choice not to invoke these rights must be preceded by the collection agency's plain, effective, and unqualified conveyance of the notices required by section 12-14-109. For the aforementioned reasons, we hold that the collection communication sent to Flood by MAB failed to effectively convey the required notices.