by Jeff Sovern
We now have reason to believe that validation notices fail to convey to consumers the information Congress wants consumers to have. If the CFPB addresses validation notices in its regulation, courts can simply follow the Bureau's lead. But it could be years before that regulation takes effect. What should courts do in the meantime? As we explain in the new version of our validation article, which went up on SSRN today:
One option would be to continue the existing approach. But that would overlook the problems with validation notices and essentially write the requirement that validation notices be effective out of the law. Another option would be to adopt an approach similar to the Federal Trade Commission’s Advertising Substantiation Policy. That Policy obliges advertisers making claims about their products to have a reasonable basis for the claims before they disseminate the advertisement. Rather than guessing or requiring consumers to demonstrate after the fact that a validation notice has not succeeded, courts should require collectors to have evidence before they use a validation notice that it will achieve Congress’s goals. Otherwise, collectors will continue to receive a free pass for frustrating the legislative goals.
I would be curious to hear any comments people may have about that suggestion.