If you routinely collect debts from consumers, you are probably familiar with the requirements of the federal Fair Debt Collections Act (FDCPA).
Under this act, consumers who disputed a debt had thirty days after receiving a debt collection notice to notify the creditor or debt collector in writing that the debt was not valid. Until now.
This week, the U.S. Court of Appeals for the Fourth Circuit (which covers North Carolina and Virginia) ruled in Clark v. Absolute Collection Service, Incorporated that the FDCPA does not require a consumer to dispute the validity of a debt in writing.
If you collect consumer debts in North Carolina, Virginia, South Carolina, Maryland or West Virginia, you need to change your procedures immediately to accept verbal notices that the consumer is disputing the validity of the debt.
Also complicating collection law, is that some federal Circuit Courts agree with the Fourth Circuit interpretation, but the Third Circuit does not. So in New Jersey, Pennsylvania and Delaware, debts must be disputed in writing.
It is more important than ever that you are current on the laws where the consumer resides when attempting to collect debts.