MICHIGAN – Court gives consumers stronger protection from debt collectors
It began with a dispute between a Michigan condominium owner and the homeowners’ association (HOA) over an unpaid assessment. By the time it reached the U.S. 6th Circuit Court of Appeals, it had become a case that may have significantly strengthened consumers’ rights under the Fair Debt Collection Practices Act(FDCPA).
The homeowner, Camille Haddad, and a debt collector, Alexander, Zelmanski, Danner & Fioritto, had sued one another since 2008 over an unpaid HOA assessment – originally $55 – that over the years ballooned to well over $1,000.
Haddad expressed willingness to pay the debt but did not know what it was for, and demanded verification from the debt collector that the debt was real. Haddad cited the FDCPA in making this request, since the law specifically says the debt collector must provide verification of the legitimacy of the debt. the debt collector must provide verification of the legitimacy of the debt.
But what constitutes “verification?” Up until now the courts have been a bit hazy on this point, but have leaned toward giving the benefit of the doubt to the debt collector. In 1999, when the 4th Circuit Court of Appeals took up a similar case, it ruled:
“[V]erification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt.”
In other words, a debt collector could simply take the original creditor’s word that the debt was real. If the creditor put in writing that the debt was real, the collector had to provide no other proof. Read more: