In Seeley v. Nevada Ass’n Services, Inc., 2012 WL 295250 (D.Nev. 2012), Judge Navarro found that a 30-day validation letter contained ‘overshadowing’ language in potential violation of the FDPCA.  The offending language, contrasted against the 30-day validation period, was as follows:


If you want to resolve this matter before a Notice of Delinquent Assessment Lien is recorded and sent to you pursuant to Nevada Revised Statutes, you must, within 10 days from the date of this let-ter, pay the balance due. Your payment must be in the form of cashier’s check or money order, payable to Nevada Association Services, and mailed to the address indicated above. Should you decide not to pay within the 10 day period, this office will be entitled to proceed with the preparation and recordation of the Notice of Delinquent Assessment Lien. Should the Notice of Delinquent Assessment Lien be prepared and recorded, the additional cost to you will be $325.00 plus recording and mailing costs, there will also be a $30.00 charge to your account to release the Notice of Delinquent Assessment Lien, plus recording costs. These charges may not be all inclusive.


Judge Navarro was not persuaded that state regulatory agencies had approved the debt collector’s letters.  


Even where a written notice contains all of the listed elements, this notice is not effectively conveyed where it is “overshadowed or contradicted by other messages or notices.” Swanson v. Southern Oregon Credit Serv., Inc., 869 F.2d 1222, 1225 (9th Cir.1989) (per curiam); see also Renick v. Dun & Bradstreet Receivable Mgmt. Servs., 290 F.3d 1055, 1057 (9th Cir.2002) (per curiam) (holding that the FDCPA was not violated where a validation notice was not overshadowed or contradicted by other language in the letter); Terran v. Kaplan, 109 F.3d 1428, 1434 (9th Cir.1997) (holding that the FDCPA was not violated where a validation notice was not over-shadowed or contradicted by other language in the letter).   “[T]he impact of language alleged to violate section 1692g is judged under the ‘least sophisticated debtor’ standard.” Swanson, 869 F.2d at 1225. “That is, if we find that the least sophisticated debtor would likely be misled by the notice …, we must hold that the [debt collector] has violated the Act .” Id.   *4 In 2006, Congress added language to the FDCPA to capture the types of violations found in case law, including the statement, “Any collection activities and communication during the 30–day pe-riod may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.” 15 U.S.C. § 1692g(b); Financial Services Regulatory Relief Act of 2006, Pub.L. No. 109–351, § 802(c), 120 Stat.1966.   Here, as in Swanson, the notice “invokes a shorter response period [than the required 30 days], promising harm to the debtor who waits beyond 10 days” and “thus represents an attempt on the part of the collection agency to evade the spirit of the notice statute and mislead the debtor into disregarding the [required debt validation] notice.” 869 F.2d at 1226 (internal quotation omitted).   Defendant argues that the approval of NAS’s letters and forms by the Nevada Department of Business and Industry, Division of Financial Institutions (“FID”) implies that the FDCPA was not violated. Defendant also argues that the absence of complaints about the form of the letter in the five years after FID approved it “strongly suggests that even the least sophisticated debtors were not confused by the text.” (Def’s Mot. for Summ. J. 12:4–5, ECF No. 11.) The Court is not persuaded by this reasoning, and Defen-dant cites no legal authority to support this proposi-tion.


Judge Navarro also found that whether the amounts sought were authorized by contract or law was a question of fact.  Judge Navarro rejected the argument that the costs were permitted by statute and caselaw, requiring the debt collector to prove that the amount was permitted:


Under the FDCPA, “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Conduct in violation of section 1692f includes “[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or per-mitted by law.” 15 U.S.C. § 1692f(l) (emphasis added). Nevada law authorizes a HOA to “charge a unit’s owner reasonable fees to cover the costs of collecting any past due obligation. NRS 116.310313(1) (emphasis added). The Madera HOA “permits NAS to charge collection fees and costs as provided under applicable State and Federal law, and the Association’s governing documents.” (Madera HOA Covenants, Conditions, and Restrictions (“CC & Rs”), Ex. C to Def.’s Mot. for Summ. J.)   In its summary judgment motion, Defendant argues that “NAS is Permitted to Pursue Collection Cost by both Nevada Law and the CC & Rs.” (Def.’s Mot. for Summ. J. 12:11–12.) In support, Defendant refers to the CC & Rs and to Chapter 116 of the Nevada Revised Statutes. (Def.’s Mot. for Summ. J. 12–15.) However, Defendant offers no evidence that the amount is authorized, instead citing statutes and case law that merely permit NAS to pursue collection costs. Defendant makes no argument that the specific costs assessed and described in the letter to Plaintiff are authorized by the CC & Rs and Nevada law. Furthermore, Defendant does not address whether the Madera HOA specifically authorized as “reasonable” the amount of the costs and fees collected. Because Defendant does not adequately address Plaintiff’s claim that Defendant violated the FDCPA under section 1692f(1), Defendant has not met its burden and is not entitled to judgment as a matter of law.