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Fourth Circuit Holds Consumers May Dispute Debts Orally

The Fourth Circuit has joined the Second and Ninth circuits to hold that the Fair Debt Collection Practices Act does not require consumers to dispute debts in writing.  (Clark v. Absolute Collection Serv., 2014 U.S. App. LEXIS 1939 (4th Cir. Jan. 31, 2014)).4thcircuit_gif

In a short per curiam opinion on Jan. 31, the Fourth Circuit adopted the reasoning of the Second and Ninth circuits and held that 15 USC 1692g(a)(3) permits a consumer to dispute the validity of a debt orally based on a plain reading of the statute.  Citing Hooks v. Forman, Hold, Eliades & Ravin, LLC, 717 F.3d 282 (2d Cir. 2013) and Comacho v. Bridgeport Fin. Inc., 430 F.3d 1078 (9th Cir. 2005), the Fourth Circuit declined to read into 1692g(a)(3) “words that are not there.”

The collection letter in question contained the following disclosure: “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.” Id., at *2-3.

The Fourth Circuit rejected the reasoning of the Third Circuit in Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991) which requires the dispute to be in writing and remains the only circuit to do so.

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Tom Dominczyk is based in Maurice Wutscher's New Jersey office and supports the firm's matters in its New York and Pennsylvania offices, practicing in the firm's Commercial Litigation, Consumer Credit Litigation and Bankruptcy groups. Tom has successfully represented financial institutions and law firms throughout the country for claims filed under the Fair Debt Collection Practices Act, Fair Credit Reporting Act and various state consumer protection statutes. In addition to his litigation practice, Tom represents national, regional and local creditors in a variety of bankruptcy matters ranging from the defense of adversary actions to complex non-dischargeability litigation and preference defenses. He served as a Judicial Clerk to the Honorable Graham T. Ross, P.J.F.P., Superior Court of New Jersey, Somerset County.