Collector - July 2018 - 33

and disputed the POD and requested more
information regarding a line-item appearing
therein. The collector responded a second
time and provided a second account ledger
evidencing the HOA debt.
In the resulting lawsuit, the plaintiff argued
the collector did not adequately verify the
debt as required in Section 1692g(b). The
lower court disagreed and granted summary
judgment to the collector.
On appeal, the Sixth Circuit considered the
question as a matter of first impression because
the FDCPA does not specify what the process
of "verification" requires. The court found the
POD information provided to Haddad was
inadequate for the plaintiff to "sufficiently
dispute the payment obligation."
The court explained that the FDCPA's
verification provision "must be interpreted
to provide the consumer with notice of how
and when the debt was originally incurred
or other sufficient notice from which the
consumer could sufficiently dispute the
payment obligation."
The Sixth Circuit noted that "[t]his
information does not have to be extensive
[but] . . . should provide the date and nature
of the transaction that led to the debt, such
as a purchase on a particular date, a missed
rental payment for a specific month, a fee for
a particular service provided at a specified
time, or a fine for a particular offense assessed
on a certain date."
Ultimately, the Sixth Circuit reversed the
district court and granted summary judgment
to the plaintiff. This issue also remains
unresolved in a number of other circuits.

WHAT DOES THIS MEAN FOR
DEBT COLLECTORS?
The Walton opinion provides greater
clarity regarding a debt collector's review

and investigation obligations when it
receives a dispute from a consumer
or a credit reporting agency. Disputes
are increasingly common in the debt
collection industry, but the language of
the FDCPA unfortunately remains silent
as to how to respond to them. At the least,
in the context of ownership of an account,
the Seventh Circuit has implied that debt
collectors may rely on the information
provided by creditors for the purposes
of verifying a debt without having to
investigate the debt further.
From the perspective of the debt
collector, this is a reasonable result. Here,
EOS had no way of knowing that the
account number was incorrect based on
the information it received from AT&T,
nor did Walton's first two disputes put
the collector on notice that the account
number was incorrect.
Although varying standards still apply,
Walton provided collection agencies with
valuable clarification regarding verification
of disputed accounts. It also arguably stands
for the proposition that generic consumer
disputes can be resolved with a cursory
investigation that does not involve the
underlying creditor.
However, given that the result would
likely have been different had the
consumer more thoroughly elaborated
on the nature of her dispute, adequate
responses to validation requests (tailored
to the circuit in which the consumer
resides) should remain a significant
component of any collection agency's
compliance strategy.
David N. Anthony is a partner, Jonathan P.
Floyd is an associate and Stephen D. Lozier
is a staff attorney for Troutman Sanders LLP.

MORE INFORMATION
Learn more about handling consumer disputes in ACA
International's SearchPoint™ documents, which are available here:
www.acainternational.org/searchpoint.

COLLECTOR 07.18

KEYNOTES

1

The Seventh Circuit
implied that debt
collectors may rely on the
information provided by
creditors for the purposes of
verifying a debt.

2

This decision aligns with
those from the Fourth and
Ninth Circuits in finding that a
debt collector discharges its
debt validation obligation by
verifying its letters accurately
conveyed information
received from the creditor.

3

Adequate responses
to validation requests
should remain a significant
component of any collection
agency's compliance
strategy.
33


http://www.acainternational.org/searchpoint

Table of Contents for the Digital Edition of Collector - July 2018

Upfront
Industry News
Best Practices
FYI
Collection Tips
Navigating Uncharted Territory
Making Sense Out of Collection Notice Requirements
Do You Need to Contact Creditors to Verify a Debt?
Calendar
Honor Roll
Getting on the Right Path
A Better Framework
ACA Members Contribute to Successful Collectors Challenge Month
The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Connecting with Legislators at ACA’s Washington Insights Conference
Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Compliance
ACA SearchPoint
Ad Index
Last Word
Collector - July 2018 - Cover1
Collector - July 2018 - Cover2
Collector - July 2018 - 1
Collector - July 2018 - 2
Collector - July 2018 - 3
Collector - July 2018 - Upfront
Collector - July 2018 - 5
Collector - July 2018 - Industry News
Collector - July 2018 - 7
Collector - July 2018 - 8
Collector - July 2018 - 9
Collector - July 2018 - Best Practices
Collector - July 2018 - 11
Collector - July 2018 - FYI
Collector - July 2018 - 13
Collector - July 2018 - Collection Tips
Collector - July 2018 - 15
Collector - July 2018 - Navigating Uncharted Territory
Collector - July 2018 - 17
Collector - July 2018 - 18
Collector - July 2018 - 19
Collector - July 2018 - 20
Collector - July 2018 - 21
Collector - July 2018 - 22
Collector - July 2018 - 23
Collector - July 2018 - Making Sense Out of Collection Notice Requirements
Collector - July 2018 - 25
Collector - July 2018 - 26
Collector - July 2018 - 27
Collector - July 2018 - 28
Collector - July 2018 - 29
Collector - July 2018 - Do You Need to Contact Creditors to Verify a Debt?
Collector - July 2018 - 31
Collector - July 2018 - 32
Collector - July 2018 - 33
Collector - July 2018 - 34
Collector - July 2018 - 35
Collector - July 2018 - Calendar
Collector - July 2018 - Honor Roll
Collector - July 2018 - Getting on the Right Path
Collector - July 2018 - 39
Collector - July 2018 - A Better Framework
Collector - July 2018 - 41
Collector - July 2018 - ACA Members Contribute to Successful Collectors Challenge Month
Collector - July 2018 - 43
Collector - July 2018 - 44
Collector - July 2018 - 45
Collector - July 2018 - The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Collector - July 2018 - 47
Collector - July 2018 - Connecting with Legislators at ACA’s Washington Insights Conference
Collector - July 2018 - 49
Collector - July 2018 - Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Collector - July 2018 - 51
Collector - July 2018 - Compliance
Collector - July 2018 - 53
Collector - July 2018 - ACA SearchPoint
Collector - July 2018 - Ad Index
Collector - July 2018 - Last Word
Collector - July 2018 - Cover3
Collector - July 2018 - Cover4
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