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Caceres v. McCalla Raymer LLP

This case involves the adequacy of the notice a debt collector must provide to a consumer when it makes an “initial communication” to the consumer under the Fair Debt Collection Practices Act (FDCPA). In this case, a law firm that is a debt collector within the meaning of the FDCPA sent a consumer a dunning letter seeking to collect more than $250,000 on a mortgage loan. The letter stated that if the consumer did not dispute the debt within 30 days, the “creditor” would assume the debt was valid. The FDCPA, however, provides that the notice must say that the “debt collector” will assume the debt’s validity under those circumstances. Under the FDCPA, the terms “debt collector” and “creditor” mean very different things, and substituting one term for another could confuse a consumer. The consumer brought a class action against the debt collector under the FDCPA, but a federal district court dismissed the complaint, ruling that the dunning letter was not an “initial communication” and that the erroneous reference to the “creditor” rather than the “debt collector” was immaterial. Public Citizen represented the consumer on appeal. The court of appeals held that the debt collector’s letter was an initial communication subject to the FDCPA’s validation notice requirements, but that the technical error of saying that the creditor rather than the debt collector would assume that the debt was valid if not disputed did not amount to a violation of the notice requirements.