Filing a collection lawsuit during the 30-day debt validation period can get a collector in hot water unless he is really careful. The United States Court of Appeals for the Second Circuit recently decided a case where Citibank hired a law firm to collect Janet Ellis’s alleged credit card debt. The law firm, Solomon & Solomon, promptly sent the FDCPA required notice advising her of the debt and informing her that she had 30 days in which to dispute its validity. Otherwise the firm would assume the debt was valid. So far, so good.
The Fair Debt Collection Practices Act requires that within five days of its initial communication with a consumer, a debt collector must send a written “validation notice” setting forth the consumer’s right to dispute the debt. The consumer then has 30 days in which to send a notice to the debt collector that he disputes. During this 30-day period, the debt collector generally is free to continue collection activities so long as they do not “overshadow” or are not “inconsistent” with the disclosures in the validation notice.