What makes a debt “valid”?

Today we argued the appeal of D’Allesandro v. Vision Financial in the New Jersey state court appellate division before a panel consisting of Judges Winkelstein and Fuentes.  The case is a Fair Debt Collection Practices Act (FDCPA) class action involving Vision sending collection letters in which it claimed the debt (allegedly owed) was a “valid debt”.  There was only one problem – no one had actually determined the debt to be “valid” – no judge, no jury, no arbitrator had ever said the money was due.  The letter was part of series of collection letter of increasing forcefulness and intensity.  An earlier letter indicated Vision was acting pursuant to state and federal law.  The very next letter claimed the debt was “valid” – as if a court had determined it was owed.  D’Allesandro claimed the reference to the debt being “valid” was misleading as to the status or character of the debt.  Vision countered by claiming D’Allesandro’s failure to refute the debt rendered it valid.

We do not believe Vision’s defense has any merit, so much as the letter does not explain that only it is considering the debt valid and the FDCPA otherwise prohibits a failure to dispute the debt as an admission of liability.  However, the state appellate courts rarely run across FDCPA cases in New Jersey and it remains to be seen if it will enforce the pro-consumer stance taken by the federal courts in the 3rd Circuit.  This panel has proven to be difficult to read as the Judges are both fairly reserved and come to argument with a specific few questions to be addressed.  I believe I was asked 3 questions and Vision’s counsel was asked one.

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