Service of process during the FDCPA’s validation period must be preceded by notice to the consumer clarifying that the lawsuit does not alter the information contained in the validation notice

The FDCPA provides that after receiving a validation notice required under 12 U.S.C. § 1692g(a), the consumer has thirty days to dispute the debt or request the name of the original creditor. If the consumer does so, the debt collector must cease collection of the debt, or any disputed portion thereof until the debt collector provides the relevant information. § 1692g(b). The validation period, however, is not a ‘grace period’; in the absence of a dispute notice, the debt collector may demand immediate payment and to continue collection activity. Relying on this provision, the debt collector in Ellis v. Solomon and Solomon, P.C., No. 09-1247-cv (2nd Cir., January 13, 2010) served the debtor with summons during the validation period rather than waiting until the validation period expired. The debtor sued the debt collector under the FDCPA contending it violated the FDCPA by personally serving her with a summons and complaint during the FDCPA thirty-day validation period, without explaining that the commencement of the lawsuit did not affect the rights set forth in the validation notice. The district court held for the debtor finding that the debt collector violated §1692g(b) which proscribes collections activities that overshadow or … [are] inconsistent with the validation notice. The Second Circuit agreed. It held that service of process during the validation period must, at a minimum, be preceded or accompanied by notice to the consumer clarifying that the lawsuit does not in any way alter the information contained in the validation notice. The court acknowledged that while the 2006 amendments to the FDCPA stated that the institution of a lawsuit does not constitute an initial communication, there is still the real potential for confusion when a consumer is served with a lawsuit during the validation period. As explained by the District Court, ‘[w]ithout some explanation to the consumer of the relationship between [the] suit and [the] provisions in the notice, it may well appear to the least sophisticated consumer that being taken to court trumps any other out-of-court rights she had.’

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