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Fourth Circuit Holds that Debtors are Permitted by the FDCPA to Orally Dispute Debts

Adam J Krohn / Posted: 2014-03-05 12:11 pm

Under the Fair Debt Collection Practices Act (FDCPA) Section 1692g(a)(3), a debt collector is required to send a debt notice to consumers from whom it is attempting to collect. With regards to disputing a debt, the notice must state that “unless the consumer, within 30 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.” There is currently a conflict among the circuit courts about whether a consumer can orally dispute a debt. If this is the case, then a notice that requires a consumer to dispute a debt in writing would violate the FDCPA.

The Fourth Circuit has recently made a decision on this issue in the case Clark v. Absolute Collection Service, Inc. In this case, after the plaintiffs did not pay a debt that was owed to a health care facility, the defendant debt collector was engaged by the facility to collect on the debt. The plaintiffs were sent a notice to the debt collector stating that “ALL PORTIONS OF THIS CLAIM SHALL BE ASSUMED VALID UNLESS DISPUTED IN WRITING WITHIN (30) DAYS.” The plaintiffs, on the behalf of a class of debtors who receive notices like this one, sued the debt collector, alleging that since the FDCPA did not require that the dispute of the debt be made in writing, the debt collector had violated the FDCPA by sending the notice that stated they must.

The debt collector argued that the notice requirement of Section 1692g(a)(3) “inherently” required that debtors dispute the debts in writing. The defendants moved to dismiss. The district court agreed and the case was dismissed.

The case was appealed to the Fourth Circuit. The decision of the district court was vacated and the case was remanded for further proceedings. The Court noted that on its face Section 1692g(a)(3) does not require that debts be disputed by debtors in writing. It was also noted that other sections in the FDCPA require written communications explicitly, suggesting that, under statutory construction principles, that such a requirement was intentionally omitted by Congress from Section 1692g(a)(3).

The Defendant also argued that by reading Section 1692g(a)(3) to permit consumers to dispute debts orally would be inconsistent because if debtors do not dispute debts in writing would waive protections that are afforded them by other provisions of the FDCPA. It was noted by the Court that even though the consumers who gave oral notice of the dispute would not be entitled to invoke some of the FDCPA’s protections, by not giving notice in writing those consumers would not be sacrificing all the protections provided under the FDCPA.

The holding of the Fourth Circuit comported with decisions on this issue in the Second Circuit and Ninth Circuit, however it was contrary to a 1991 decision by the Third Circuit.

In the Third Circuit case, Graziano v. Harrison, one of the plaintiff’s claims what that the defendant’s requirement that the “plaintiff dispute the debt in writing violated” Section 1692g(a)(3) of the FDCPA. The court noted that the “statutory language does not expressly require that a debtor’s dispute be in writing.” However, the court decided that “given the entire structure of [Section] 1692g, subsection (a)(3) must be read to require that a dispute, to be effective, must be in writing.”

The Circuit also noted that by adopting the plaintiff’s reading of the statute and requiring the debt collector to accept 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 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.” Additionally, a writing would create a lasting record that the debtor has disputed the debt, avoiding potential conflicts.

The remaining Circuits have yet to decide a case on this issue.

Our experienced attorneys here at Krohn and Moss Consumer Law Center have also provided many helpful resources regarding the TCPA and the FDCPA and how telephone debt collectors should act. We have been successfully representing those abused and taken advantage of by debt collectors for years, and have a long list of successful stories to share with you. We offer a FREE CASE REVIEWfor you to assess whether we can assist you with your matter. Please do not hesitate to contact us toll free at 1-800-875-3666 or visit our website at

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