Do consumers have to dispute debts in writing in order to avail themselves of the protections of the Fair Debt Collection Practices Act (FDCPA)?
The Second, Ninth, and now Fourth Circuits all agree: the plain text of the FDCPA, even when the result is a wee bit odd, controls. Oral is okay, but written brings more protection. And then, there's the Third Circuit, which is willing to read things into the text that aren't there, for the sake of making the statute make sense.
What's got the circuits split? It's a question we see all too often: sloppy statutory drafting or intended as written?
Here's the language that has the courts all shook up, from 15 U.S.C. § 1692g(a)(3) and (4):
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector;
The rest of the statute continues, flippity-floppity, between disputing "in writing" or via unspecified mediums, presumably oral.
Three Cases, All the Same
In all three circuits, deadbeats turned the tables on debt collectors by alleging violations of the FDCPA due to misleading statements, made pursuant to the above requirements, stating that any challenge must be in writing. Note, once again, that § 1692g(a)(3) does not mention "in writing." In the Fourth Circuit's variant, this was the text used by the debt collector:
"ALL PORTIONS OF THIS CLAIM SHALL BE ASSUMED VALID UNLESS DISPUTED IN WRITING WITHIN THIRTY (30) DAYS; IN WHICH CASE, VERIFICATION OF THE DEBT OR A COPY OF THE JUDGMENT WILL BE PROVIDED TO YOU. IF THE ORIGINAL CREDITOR IS DIFFERENT FROM THE ABOVE NAMED CREDITOR, THE NAME OF THE ORIGINAL CREDITOR WILL BE PROVIDED UPON REQUEST."
Four Circuits, Three Can Read Pretty Good
As we detailed when the Second Circuit raised the question last year, this is simply a matter of statutory interpretation. Back in 1991, the Third Circuit held that an implied written requirement for § 1692g(a)(3) simply makes sense:
"[U]pon the debtor's non-written dispute, the debt collector would be without any statutory ground for assuming that the debt was valid, but nevertheless would not be required to verify the debt or to advise the debtor of the identity of the original creditor and would be permitted to continue debt collection efforts."
The Ninth, Second, and Fourth Circuits, sharing both citations and the presumption that Congress generally means what they say, stuck to the plain text, leaving us with a dual system of debt collection:
- Oral dispute? Any mention of the debt by the creditor has to come with a "disputed" caveat and payments made go towards any undisputed portion.
- Written dispute? The rest of the statute applies. (Per the Second Circuit: Debt collector must stop collection of the debt until several statutory conditions are met. It must also provide written validation of the debt and disclose the name of the original creditor.)
Plain text beats judges "interpreting" statutes as they see fit (that's how we end up with circuit splits, after all), but we'll reiterate our previous concerns: the dual dispute system, intentional or not, is clunky and will likely confuse consumers and collectors alike.
- Clark v. Absolute Collection Service (Fourth Circuit Court of Appeals)
- Collection 'Fees' or 'Costs'? Contractual Language Nails Debt Collector (FindLaw's Eleventh Circuit Blog)
- FDCPA Claim Survives Mootness Challenge (FindLaw's Fourth Circuit Blog)