"Are Validation Notices Valid? An Empirical Evaluation of Consumer Understanding of Debt Collection Validation Notices" Free Download
St. John's Legal Studies Research Paper No. 16-0018

JEFF SOVERN, St. John's University - School of Law
KATE E. WALTON, St. John's University - Department of Psychology

A principal protection against the collection of consumer debts that are not actually owed is the Fair Debt Collection Practices Act’s validation notice, which obliges debt collectors demanding payment to notify consumers of their rights to dispute debts and request verification, among other things. No one has ever studied whether consumers understand the notices or what they take away from them. Consequently, for nearly four decades, courts have decided whether validation notices satisfied the FDCPA without ever knowing when or if consumers understand the notices. This Article reports on the first study of that question.

Collectors who prefer that consumers focus on the request for payment rather than a statement of consumer rights will find our results heartening. When we surveyed consumers by showing them a collection letter the Seventh Circuit had upheld against challenge, on most questions respondents did not show significantly better understanding of the validation notice in that letter than on an otherwise identical letter without any validation notice at all. Nearly half the respondents who saw the court-approved letter did not realize it said they could dispute the debt. More than half the court-approved letter respondents seemed confused by the notice’s phrasing about when the collector would assume the debt to be valid. About a quarter did not realize they could request verification of the debt, and nearly all who realized they could seek verification also thought that an oral request was sufficient even though both the statute and notice specify that a writing is required. More than a fifth of respondents thought that if they did not meet the thirty-day deadline specified in the validation notice for disputing the debt, they would have to pay the debt or could not defend against a suit to collect it even if they did not owe the debt. Under the standard the FTC uses for determining deception in surveys, the notice would be found deceptive.

Our results raise troubling questions about the effectiveness of current forms of validation notices, and therefore whether consumers being pursued by collectors for debts they do not owe are appropriately protected. The willingness of courts to approve validation notices that do not serve Congress’s goals creates the illusion of consumer protection without the reality.

"Ambush Marketing: A Threat for Sponsors" Free Download

SANKALP JAIN, Delhi High Court

Ambush marketing is a means of getting the maximum bang for the buck while stealing some of a rival’s thunder. As the costs of becoming official sponsors of a major sports event have mushroomed in recent years, sponsors increasingly have to deal with what has become known as ambush marketing. Ambush marketing as a concept first came to light at the 1984 Los Angeles Olympics. Those Games, which generated a surplus of some US$250 million, were deemed an overwhelming success. They were the first to be funded entirely privately. Prior to this any number of sponsors were allowed to tie themselves to the Olympics on an ‘official’ basis. In 1976, Montreal Olympics there were 628 ‘official’ sponsors.

"On the Surprising Use of Unenforceable Contract Terms: Evidence from the Residential Rental Market" Free Download
Harvard John M. Olin Center for Law, Economics, and Business, Discussion Paper No. 61, 2015


This paper explores the prevalence of unenforceable terms in consumer contracts. Taking the residential rental market in the Greater Boston Area as a test case, the study analyzes a sample of 70 leases in terms of Massachusetts Landlord and Tenant Law. The paper’s findings reveal that landlords frequently use legally dubious — as well as clearly invalid — provisions in their contracts. Building on psychological insights and on a survey-based study of 279 tenants, the paper suggests that such clauses may significantly affect tenants’ decisions and behavior. In particular, when a problem or a dispute with the landlord arises, tenants are likely to perceive the terms in the lease contract as enforceable and forgo valid legal rights and claims. In light of this evidence, the paper discusses preliminary policy prescriptions.


About this eJournal

This eJournal distributes working and accepted paper abstracts of articles, recently published articles, books, legislative reports, conferences, and other publications that address issues of interest to consumer law scholars and practitioners. Coverage includes legal issues pertaining to advertising, consumer reporting (including credit repair organizations), discrimination (including redlining), consumer disclosure (such as the Truth in Lending Act, the Real Estate Settlement Procedures Act, and consumer leasing), consumer fraud (including issues arising under the Federal Trade Commission Act, state UDAP statutes, odometer laws, referral sales, and bait and switch statutes), unconscionability, standard form contracts, consumer privacy (including telemarketing, spam, spyware, phishing, direct mail, financial privacy, common law privacy torts in consumer transactions, and online privacy), identity theft, data protection, cooling off rules (including door to door sales regulation), payment systems (such as credit and debit cards, internet payment issues, stored value cards (including gift cards and phone cards), and electronic transfers), warranties (including UCC warranties, lemon laws, and the Magnuson-Moss Warranty Act), consumer product safety, commercial speech doctrine, debt collection, repossession, predatory lending (including asset-based lending, equity stripping, flipping, balloon payments, negative amortization, loan packing, rate-risk disparities and yield-spread premiums), payday lending, usury, credit insurance, electronic shopping (including electronic signatures and records, formation of contracts, and payments), the holder in due course regulation, mortgages, student loans, repossession, foreclosure, regulation that pertains to consumer markets and enforcement of consumer laws (including class actions, preemption, arbitration, administrative enforcement, small claims courts and attorney's fees). The eJournal does not cover landlord-tenant issues or criminal law. The eJournal welcomes a broad range of methodological approaches, including conventional doctrinal analyses, law and economics approaches, historical discussions, socio-legal analyses, law and society approaches, discussions of consumer psychology that bear on legal issues, international law analyses and comparative law approaches.

Editor: Jeff Sovern, St. John's University


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Consumer Law eJournal

Associate Dean, Director - Consumer Law Center, Dwight Olds Chair in Law, University of Houston Law Center

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Professor of Law, Georgia State University College of Law

George Alexander Madill Professor of Contracts and Commercial Law, Washington University in Saint Louis - School of Law

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