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Crenshaw v. Computex Information Services, Inc.

2011 WL 1640175 (U.S. Dist. Ct. D. N.J. 2011) (Unpublished)

FDCPA — Where two “debtor collectors” are responsible for collecting different aspects or different portions of a debt, it is not improper under the Fair Debt Collection Practices Act for them to use a single notice instead of two separate notices.

After a residential tenant failed to pay rent, a collection company sent the tenant a “validation” notice in an attempt to collect the outstanding rent and associated fees on behalf of its client, the landlord. The firm simultaneously filed a complaint for eviction. By letter, the tenant’s counsel disputed the validity of the debt, requested a full accounting, and demanded that the collection firm halt its collection efforts and stop communicating with the tenant. The firm responded with a full accounting and explanation of the outstanding debt, including the rent and late fees for two months and including a legal fee. The tenant then paid the rent outstanding along with fees and interest. The next month, the collection company sent a nearly identical validation letter to the tenant based on her unpaid, outstanding rent for that current month. In response, the tenant’s counsel sent another letter advising the firm that the tenant was represented by counsel and instructing it to halt all direct communications.

The tenant alleged that the collection company violated the Fair Debt Collections Practices Act (FDCPA) because the inclusion of a law firm on its letterhead was designed to create the false belief that the law firm was participating in debt collection, when in fact the law firm was merely initiating an eviction. The collection firm responded that the law firm’s filing for eviction was in fact a form of debt collection, which is why the law firm was included in the letter. The Court agreed that the law firm qualified as a debt collector, and including its name in the letter was not misleading.

Next, the tenant alleged that the collection firm violated the FDCPA’s notice requirements because the notice letter did not clearly explain who the tenant should contact to retrieve the correct amount due and to dispute the validity of the debt; the firm should have sent two validation notices, instead of one, since there were two debt collectors; and the letter gave the impression that disputing the debt was not possible since the matter was already referred to the court. Thus, according to the tenant, the notice did not adequately notify her of her rights. Specifically, she argued that the letter was defective and confusing because it instructed her to call the firm or the landlord to pay the debt or to receive the exact amount owed, while also asking her to contact, if she chose to dispute the validity of the debt, the collection firm or the law firm, the senders of the letter. Thus, the tenant claimed that two notices were required, because the FDCPA requires a debtor to notify each debt collector if a debt is being disputed and there is no provision that states that notification to one debt collector will bind the other. Additionally, the tenant claimed that the letter’s references to a “court” could lead an unsophisticated debtor not to dispute the debt, believing erroneously that to do so was futile because the matter had already been referred to the court.

The Court found that while the letter provided multiple options for obtaining the amount due or disputing the validity of the debt, the options were not inaccurate and did not otherwise require contradictory demands. The letter clearly identified all parties participating in the debt collection process and what role each entity played. The Court found that the least sophisticated debtor would have been adequately notified of his or her rights by a careful reading of the document, as the law demands. The Court also disagreed that two separate notices were required; it observed that no binding or persuasive authority required such action. Finally, the Court found that references to a court were not inaccurate, since eviction proceedings had already been commenced. Even absent such proceedings, the Court found that the letter was not misleading in this regard because the plain language of the letter separated the court dealings from the independent right to dispute the debt.

The Court next rejected the tenant’s claim that the letter was deceptive. The tenant had argued that the use of law firm letterhead deceptively implied that the threat of litigation loomed if the tenant failed to pay the debt or adequately dispute it. The Court found that use of the letterhead was appropriate because eviction proceedings had already been commenced.

Lastly, the tenant argued that the collection firm had violated the FDCPA provision prohibiting creditors from communicating with a debtor who has requested that no further communication take place. The Court found that the collection firm had, in fact, contacted the tenant after such refusal was expressed; however, the subsequent contact was in reference to a new debt. The tenant satisfied the first debt, and later defaulted on a later rent payment. That default created a new outstanding rental obligation. It was independent of the first even though it arose from the same lease. The Court, in granting the collection firm’s summary judgment motion, found that the firm was not bound by the tenant’s notice with respect to the first debt when communicating regarding the second debt.

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