Collector - August 2018 - 48

IAP

Seventh Circuit Emailed Validation Notice Case
Forces Tip-Off Between ACA and the BCFP
ACA International and the BCFP filed separate amicus briefs with the Seventh Circuit Court of Appeals
regarding the debt collection industry's ability to communicate with consumers by electronic means.
By Karen Scheibe Eliason

M

ore than four years have passed
since the Bureau of Consumer
Financial Protection issued an
Advanced Notice of Proposed Rulemaking
in November 2013 to consider a variety of
rules governing debt collection, including
electronic delivery of validation notices. In
April, the BCFP acknowledged in its semiannual report to Congress that it is still
working toward release of a proposed rule
concerning debt collection.
Without well-crafted, reasonable and
workable debt collection rules from the
BCFP clarifying the Fair Debt Collection
Practices Act so that professional debt
collectors can fulfill their vital role in the
economy without the fear of opportunistic
litigation, participants in the accounts
receivable management industry have looked
to the courts for guidance.
Most recently, the debt industry and
government alike have turned their
attention to the Seventh Circuit Court
of Appeals to weigh in on the issue of
whether and in what circumstances a debt
collector may use email to communicate
with consumers to satisfy the written-notice
requirements of Section 1692g(a).
In Lavallee v. Med-1 Solutions, LLC,
7th Cir., No. 17-3244, appeal docketed
10/27/17, a consumer is accusing an ACA
member collection agency of failing to
comply with the FDCPA's requirement
that a debt collector "send the consumer
a written notice containing" statutorily
required information about the debt, even
though the agency transmitted a proper
validation notice to the consumer by secure
email attachment.
Both ACA and the BCFP filed "friend of
the court" briefs with the Seventh Circuit

48

to share their respective viewpoints-
with ACA asking the appellate court to
provide guidance to the debt collection
industry, establishing that email can be
"written notice" within Section 1692g(a)'s
meaning, and the bureau urging the
appellate court to address the applicability
of the Electronic Signatures in Global and
National Commerce Act (E-SIGN Act) to
circumstances in which a debt collector
wants to use email to comply with the
FDCPA's requirements to send written
validation notices.
In the Lavallee case, the agency sought
to collect medical debts from the consumer

agency argued that it was irrelevant that
the consumer failed to open the documents
because it had met its obligation by sending
the initial emails that contained the
validation notices.
The district court judge in the Southern
District of Indiana who considered the
issue in Lavallee granted the consumer's
motion for summary judgment,
concluding that the agency did not "send"
the validation notice for purposes of
Section 1692g because the agency "knew,
or easily could have determined at the
time" that the consumer "never accessed,
or attempted to access the 'Secured

"The district court also opined that the average user
is less likely to open an email from an unknown
sender, since security agencies warn that suspicious
email attachments are a common tool for attackers."
after she failed to respond to the validation
notices it previously transmitted to her. The
agency claimed the validation notices were
sent via email, using a secure process that
required the recipient to click on a link to
download the actual validation notice(s).
The consumer claimed she did not receive
the emails and, therefore, she claimed the
agency failed to provide her with a timely
validation notice containing the mandatory
disclosures required under the FDCPA.
The agency's records confirmed that
although the emails may have been received,
the consumer did not open the packages
(click on the links) in those emails. The

Package' containing the validation notice,
and the email itself did not contain the
validation notice."
The district court explained: "Indeed, it
is the presumption of receipt that makes
the sending of notice by the debt collector
sufficient without the collector proving actual
receipt. But if notice is not sent in a manner in
which receipt should be presumed as a matter
of logic and common experience, then it
cannot be considered to have been 'sent.'"
The district court also found that documents
transmitted as a web-based email attachment
cannot be deemed as reliable as U.S. mail,
stating "[i]ndeed, in the court's estimation,

ACAINTERNATIONAL.ORG


http://www.ACAINTERNATIONAL.ORG

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