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FDCPA No Written Requirement for Debt Validity Dispute

By William Peacock, Esq. on May 31, 2013 | Last updated on March 21, 2019

Quick primer on disputing a debt under the Fair Debt Collection Practices Act:

Debt collector sends a notice containing the familiar admonition that "this is an attempt to collect a debt. Any information collected will be used for that purpose." It also tells the debtor that if they believe the debt to be invalid, they must dispute the debt within thirty days. If they do so, the debt collector is required to "verify" the debt before continuing collection efforts.

There's one small ambiguity in the statute, however. Note the difference between the following two provisions, § 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;

We added the emphasis. Your life is hard enough, right?

Anyway, the rest of the statute continues the flip-floppery between “in writing” and no mention of medium of communication. This presents the question: sloppy drafting or intentional distinction?

Forman, Holt, Eliades & Ravin, LLC. argues the former. Their debt collection notices contained the warning that all disputes must be in writing. That interpretation of the statute’s requirements vibes with the Third Circuit’s holding in Graziano v. Harrison, where they stated:

“[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.”

Alright. But the Ninth Circuit disagreed in Camacho v. Bridgeport Financial, Inc., where the court applied the long-standing presumption that Congress generally means what they say, especially when they use a term in only certain provisions and omit it from others. The Second Circuit today agreed, and under the two circuits’ interpretation of the statute, you have a dual system of debt dispute:

  • Oral disputes mean any mention of the debt by the creditor has to come with a “disputed” caveat, payments made go towards any undisputed debts, and the legislative purpose of facilitating debt dispute is furthered by easier, oral disputes.
  • Written disputes require the debt collector to stop collection of the debt until several conditions are met, provide written validation of the debt, and require them to name the original creditor.

It’s clunky, more confusing to consumers, and in reality makes little sense. Plus, have you ever tried proving that you orally disputed something? 

When in doubt, write it out.

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