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Decided: January 31, 2014

The Fourth Circuit, finding that 15 U.S.C. § 1692g(a)(3) permits consumers to orally dispute the validity of a debt, vacated the district court’s order dismissing the plaintiff’s complaint and remanded for further proceedings.

Dana Clark and David Clark (“the Clarks”) brought this class action suit under the Fair Debt Collection Practices Act (“FDCPA”) against Absolute Collection Service, Inc. (“ACS”) for its actions in attempting to collect a debt. The Clarks incurred two debts at a health care facility in Raleigh, North Carolina. When the Clarks failed to pay, the health care facility referred the debts to ACS, a third-party collector. In its efforts to collect, ACS sent the Clarks separate collection notices. In both collection notices, a disclosure statement provided that all portions of the debt “shall be assumed valid unless disputed in a writing within thirty days.”

Claiming that ACS violated their right to challenge their debt orally under Section 1692g(a)(3) of the FDCPA, the Clarks brought this class action. ACS, however, moved to dismiss the suit, contending that the collection notice complied with the FDCPA because Section 1692g(a)(3) contains an inherent writing requirement. The district court granted ACS’s motion, and this appeal followed.

On appeal, addressing this matter of first impression for the court, the Fourth Circuit noted that the Third Circuit held that Section 1692g(a)(3) must be read to include a writing requirement. In contrast, however, the Second and Ninth circuit held that the plain text of Section 1692g(a)(3) permits oral disputes, and that such a reading results in a logical, bifurcated scheme of consumer rights. In line with the Second and Ninth Circuit, the Fourth Circuit held that the FDCPA clearly defines communications between a debt collector and consumers. In so holding, the court noted that Sections 1692g(a)(4), 1692g(a)(5), and 1692g(b) explicitly require written communication, whereas 1692g(a)(3) plainly does not. Thus, the court rejected ACS’s argument that 1692g(a)(3) must be read to impose an inherent writing requirement, and refused to insert additional language. The Court, therefore, found that Section 1692g(a)(3) permits consumers to orally dispute the validity of a debt. Accordingly, it vacated the district court’s judgment and remanded for further proceedings.

Full Opinion

– W. Ryan Nichols