Thanks For Nothing – Court Rules CFPB’s Safe Harbor For Model Notice Does Not Apply To FDCPA Claims

While most are still recovering from the 11/10/21 Reg. F deadline and the time, effort and expense of gearing up, we all believed that once the work was done, we would have clear rules and a “safe harbor” that would result in fewer silly lawsuits – especially with the Model Notice. Wrong!

Enter Rogers v. GC Services, LP, and we can see how shallow the water of that safe harbor really is. This case was filed in Florida, with a consumer alleging that the debt collector violated the FDCPA by sending an undated validation notice (remember, the model offered up by the CFPB also did not have a date on it). The letter also included an itemization table that tracked the CFPB’s model notice, including the amount of the debt “between [the itemization date] and today,” and the “Total amount of the debt now.” 

The Plaintiff complained that the absence of a date on the letter made it impossible to determine the date to which the terms “today” and "now” referred. The Plaintiff contended that missing the date was withholding of a “material term” about the amount of the debt when the letter was read and made the letter seem “illegitimate,” “suspicious” and "misleading.” 

The Defendant moved to dismiss the complaint, arguing that using the Reg. F Model Notice meant that it enjoyed a safe harbor under the FDCPA.Case over, right?  Nope!

In a surprising ruling, the court denied the motion, finding that using the Model Notice did not ensure compliance with the FDCPA - the Model Notice arose only from the CFPB’s implementing regulations, not the FDCPA itself. In other words, there could be a safe harbor for a claim under Reg. F, but that did not mean there was a safe harbor if a letter violated the FDCPA. 

So according to the Rogers court,a debt collector can conceivably comply with Reg. F but still violate the FDCPA. 

Not done eviscerating the safe harbor, the court also concluded that a dismissal was inappropriate, because even if the safe harbor rules applied to the FDCPA’s statutory requirements, the Bureau’s safe harbor only applied to the form of the letter,not the content. The judge further ruled: “[A] safe harbor for the form of provided information is different from a safe harbor for the substance of that information.”

After removing the protective safe harbor, the court next ruled the letter lacking, reasoning that a date would be needed for “strict compliance with the FDCPA’s mandate that a debt collector’s initial communications state ‘the amount of the debt’[which] is often impossible, especially where variable interest and other items accrue day to day. And even if the statement is accurate when the letter is drafted and sent, it may not be accurate by the time it is received.” 

The court believed that the debt collector’s sending an undatedletter, would not allow the least sophisticated consumer to understand the full amount of the debt, because although the letter listed the amount due on the itemization date and the amounts that had accrued since then, “the letter [did]not contain information Defendant relied on to reach this conclusion.”

Time to toss out the model notice? Not with oneruling. But does this ruling undermine some of the other protections in Reg. F, like the 7 in 7 rule from an excessive call claim? Confused? We are here to help!

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