On January 23, 2014, the Seventh Circuit Court of Appeals affirmed the dismissal of four lawsuits against debt collectors that challenged validation notices under 1692g(a)(4).
The disputed provision of the letters involved the 30-day language notifying consumes of their right to dispute the debt, which letters read in relevant part:
“Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification.”
The plaintiffs argued that this second sentence failed to adequately provide them with the notice required by 1692g(a)(4) because it omits the phrase “that the debt, or any portion thereof, is disputed,” and thus it directs the consumer to request verification instead of disputing the debt. which requires the debt collector to include 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.”
The Seventh Circuit disagreed with plaintiffs’ theory, holding that “a request to verify a debt constitutes a ‘dispute’ under the [FDCPA]” because “even if there is a literal distinction between requesting verification of a debt and disputing a debt, we treat a request for verification as a dispute within the meaning of the [FDCPA].”
Further, in one of these four lawsuits, the Court held that the statement “we believe you want to pay your just debt” did not overshadow the required Section 1692 language and did not imply a judgment had already been obtained on the debt.
Validation notice challenges are a recurring source of litigation for companies under the FDCPA’s purview, and collection agencies should remain mindful of ensuring that notices are consistent with the prevailing interpretations of the FDCPA in each of the jurisdictions where collection activities are conducted. This is particularly true concerning whether Section 1692g(a)(3) permits a consumer to orally dispute the validity of a debt given the growing split among the courts of appeals following the Fourth Circuit’s decision in Clark v. Absolute Collection Servs, Inc. that we previously discussed.