An appeals court Wednesday upheld a lower court decision in a Fair Debt Collection Practices Act case against a collection agency. The case, Wallace v. Diversified Consultants Inc., centered on whether there is a difference between the words "of" and "after" in a debt collection letter's validation notice.
The Sixth Circuit Court of Appeals said there is not.
Carl Wallace had sued Diversified Consultants after accusing the company of violating the FDCPA because of the wording in a $2,000 phone bill. The company originally wrote Wallace that it would assume the validity of a debt unless he disputed it "within 30 days of receiving this notice."
Wallace zeroed in on the word of as opposed to using the word after as outlined in section 1692g(a)(3) of the Fair Debt Collection Practices Act.
Wallace argued that the two words can have different meanings. The three-judge panel noted that "no reasonable consumer, even an unsophisticated one, would read the letter as an instruction to travel back in time (though no more than thirty days back) to dispute the debt."
"A statement works if it speaks with enough clarity to convey the required information to a reasonable but unsophisticated consumer, the panel wrote. The letter to Wallace did that. It informed him that he had thirty days to dispute the debt, that the clock would start running when he received the letter, and that if he did not act the collector would assume the debts validity."
U.S. District Judge Robert H. Cleland, from the Eastern District of Michigan, originally sided with Diversified and granted the company judgment on the pleadings. Wallace then appealed to the Sixth Circuit.