The Takeaway:
In response to a consumer’s demand for verification of an alleged debt, the debt collector ordinarily must verify the debt by showing the creditor’s grounds for the claim and provide an explanation as to why the debt exists.
The Facts:
Apothaker & Associates (Apothaker) attempted to collect a junk debt that had been sold to a junk debt buyer. Apothaker advised the debtor that it would provide verification of the alleged debt upon written dispute. The debtor disputed the alleged debt in writing and stated that she did not understand the origin of the alleged debt.
In response, Apothaker wrote to the debtor and advised her that she owes what Apothaker claims she owes. Such a circular argument provided the debtor with no confidence that Apothaker wasn’t dunning the wrong person or collecting a debt that already had been paid.
She sued Apothaker claiming that it did not verify the debt as required by the Fair Debt Collection Practices Act (FDCPA).
The Ruling: Apothaker & Associates Must Provide Meaningful Verification of Debts
The Court succinctly and persuasively ruled:
To verify is not merely to state the creditor identity and the amount owed. To verify is to show the creditor’s grounds for the claim, to support the claim with an explanation for the assertion of the existence of the debt. It does not accomplish an affirmation of the truth of the debt to say that the creditor says that its claim is a true claim. Rather, the truth of the claim is verified by making an adequate showing of the factual basis for the claim.
Moreover, the court relied on a higher court’s decision that held a verification based upon computer printouts provided to the debtor was sufficient to inform the amounts of the debt, the services provided, and the dates on which the debts were incurred.
Because Apothaker provided no computer printouts or otherwise advised the debtor of the services provided and their dates, the debtor stated a valid claim against Apothaker for violating the FDCPA.