Fourth Circuit Lets Consumers Orally Dispute Validity Of Debts

In a per curiam decision which vacated the lower court's dismissal of a consumer class action under the federal Fair Debt Collection Practices Act (FDCPA), the U.S. Court of Appeals for the Fourth Circuit, in a case of first impression in that circuit, found that debt collection notices violate the FDCPA if they require consumers' disputes of the validity of debts to be in writing. In Clark v. Absolute Collection Service, Incorporated, No. 13-1151, ___ F.3d ___ (4th Cir., Jan. 31, 2014), the court held that section 1692g(a)(3) of the FDCPA does not explicitly or implicitly require consumer's disputes to be in writing.

Section 1692g(a)(3) of the FDCPA requires that debt collectors send written notices to consumer debtors containing "...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...." However, pursuant to section 1692g(b) of the FDCPA, when a consumer "notifies the debt collector in writing" (emphasis added) that he or she disputes a debt, the debt collector must cease collection activity until verification of the debt is obtained and mailed to the consumer.

In this case, the debt collector issued collection notices stating, among other things, that "ALL PORTIONS OF THIS CLAIM SHALL BE ASSUMED VALID UNLESS DISPUTED IN WRITING WITHIN THIRTY (30) DAYS...." (Emphasis added). The debt collector argued that its collection notices comply with section 1692g(a)(3) of the FDCPA because...