Alpha Recovery Corp. Accused of Misstating Consumer’s Rights

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Alpha Recovery Corp. is on the receiving end of a proposed class action lawsuit that claims it unlawfully miscommunicated a consumer’s rights regarding debt disputes. According to the complaint, the defendant sent the plaintiff a collection letter containing a “General Notice” that stated that “failure to dispute the validity of this debt may not be construed as an admission of liability by the consumer.” The suit argues that this statement is misleading and overshadowed the included validation notice concerning the plaintiff’s right to dispute the debt. The sentence in the letter allegedly repeated the following language contained in the Fair Debt Collection Practices Act (FDCPA), but omitted a material phrase, as noted in the complaint (emphasis added):

“The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.”

The case alleges that the omission of the phrase “by any court” leads the consumer to believe that disputing the debt “is of little significance,” when in reality, failing to dispute a debt or request validation will allow debt collectors, as opposed to a court, to assume the debt is valid. Absent a dispute, the defendant is free to report the debt to consumer reporting agencies as undisputed, according to the complaint, which can cause significant harm to the debtor’s credit score. The suit argues that the language in the defendant’s letter is meant to discourage disputes and rob consumers of their FDCPA rights.