The United States Court of Appeals for the Fourth Circuit vacated a lower court’s ruling holding that the Fair Debt Collection Practices Act permits consumers to dispute the validity of a debt orally. Plaintiffs filed a class action against a debt collector alleging violations of section 1692(g)(3) of the FDCPA. Section 1692(g)(3) requires a debt collector to, within 5 days of initial communication, send consumers a written notice containing a statement that unless the consumer disputes the validity of the debt within 30 days after receipt of the notice, the debt will be assumed to be valid, among other things. Plaintiffs alleged that defendant’s collection notice violated section 1692(g)(3) because it stated that debtors could only dispute the validity of their debt in writing. Plaintiffs also alleged that defendant’s imposition of a writing requirement amounted to use of a false representation or deceptive means to collect or attempt to collect a debt, in violation of the FDCPA. Defendant filed a motion to dismiss arguing that its collection efforts complied with the FDCPA because section 1692(g)(3) contained an “inherent writing requirement.” The lower court agreed reasoning that “permitting an oral dispute of the validity of a debt would leave consumers ‘with fewer protections and in a potentially far more confusing station than if a writing is required.’” Plaintiffs appealed.
In vacating the lower court’s decision, the Court first looked to the language of the statute and agreed with holdings in the Second and Ninth Circuits, Hooks v. Forman, Holt, Eliades & Ravin, LLC, 717 F.3d 282 (2d Cir. 2013) and Camacho v. Bridgeport Fin. Inc., 430 F.3d 1078 (9th Cir. 2005), respectively. The Court noted that the Second and Ninth Circuits found that the FDCPA “clearly defines communications between a debt collector and consumers.” In particular, the Court held that the provision requiring the written notice contain a validation notice “plainly” did not require written communication; whereas the other components of the written notice did (i.e., the requirement to state that if the consumer notifies the debt collector in writing within the 30-day period that the debt is disputed, the debt collector is required to obtain verification of the debt and mail it to the consumer). The Court also rejected defendant’s argument that an inherent writing requirement must be read into section 1692(g)(3) or otherwise, permitting oral disputes would “serve only to confuse consumers.” The Court held that under well-established principles of statutory construction, it was required to “give effect, if possible, to every clause and word of a statute” and avoid any interpretation that renders “any clause, sentence, or word… superfluous, void, or insignificant.” Therefore, relying on the writing requirements in other subsections of 1692(g) would violate such well-established principles, “leaving section 1692(g)(3) with no independent meaning.”
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