Consumer Finance Litigation

Hernandez v. Williams, Zinman & Parham, P.C., 2014 WL 977649 (D. Ariz. Mar. 13, 2014) Plaintiff Hernandez filed a complaint against Defendant Williams, Zinman & Parham, P.C. ("WZP"), a law firm, after WZP sent her a debt collection letter. In the letter, WZP sought to collect an auto-finance related debt on behalf of a third-party creditor. Prior to WZP's involvement, the third-party debt collector had attempted unsuccessfully to collect the money owed by Hernandez but had properly sent Hernandez a debt validation notice pursuant to 15 U.S.C. section 1692(g)(a). Thereafter, WZP's initial communication via letter with Hernandez contained the following notice: You, the consumer, have thirty (30) days after receipt of this notice to dispute the validity of the debt, or any portion thereof. Unless you dispute the validity of this debt within thirty (30) days, the debt will be assumed to be valid by this firm. If you do notify us of a dispute, we will obtain verification of the debt, or a copy of a judgment, and mail it to you. Also, upon your request within thirty (30) days, we will provide you with the name and address of the original creditor, if different from the current creditor....This communication is from a debt collector. This communication is an attempt to collect a debt for the Creditor and any information obtained as a result thereof will be used for that purpose. Hernandez argued that WZP's initial letter did not satisfy the requirements of section 1692(g)(a); namely, WZP's letter did not properly advise her that in order to dispute the debt, she would need to do so in writing. However, WZP contended that Hernandez's complaint rested entirely upon her false assumption that WZP's letter must comply with the FDCPA as a debt validation notice pursuant to section 1692g(a). Specifically, because its letter to Hernandez was subsequent to the third-party debt collector's, it was not the "initial communication" with the consumer with respect to the debt at issue. Therefore, WZP contended that its letter did not need to comply with the FDCPA as a debt validation notice. The Court held, as a matter of law, 15 U.S.C. section 1692g(a)'s statutory requirements did not apply to WZP's letter because it was not the initial communication that Hernandez received on the alleged debt. Under the FDCPA, it is the "initial" communication with the consumer that triggers the mandatory debt validation notice requirements. Furthermore, it was undisputed that WZP was not the initial debt collector. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.