To Violate FDCPA, Collection Letter Must ‘Expressly’ Require Written Debt Dispute, Ninth Circuit Holds


[authors: Alan S. Kaplinsky, John L. Culhane, Jr., Mark J. Furletti, Barbara S. Mishkin, Jeremy T. Rosenblum, Mercedes Kelley Tunstall]

A collection letter that implicitly requires a debtor to dispute a debt in writing does not violate the Fair Debt Collection Practices Act, the U.S. Court of Appeals for the Ninth Circuit has ruled.

In its June 8, 2012, decision in Riggs v. Prober & Raphael, the Ninth Circuit held that the “validation notice” in a collection letter violates Section 1692g(a)(3) of the FDCPA only if it “expressly” requires a consumer to dispute a debt in writing.

FDCPA Section 1692g(a) requires a debt collector to send a written notice known as a “validation notice” to a consumer within five days of the collector’s initial attempt to collect a debt and specifies what information the notice must contain.

In its analysis, the Ninth Circuit considered two items of information required by Section 1692g(a). Section 1692g(a)(4) requires a statement that if a consumer disputes a debt in writing, the collector will obtain verification. But while Section 1692g(a)(3) requires a statement that the debt will be assumed to be valid unless the consumer disputes the debt within 30 days, it is silent as to what form the dispute must take to avoid that assumption.

The Ninth Circuit observed that when these requirements are read together, they could be read to imply that a debtor must dispute a debt in writing. “If the FDCPA itself can be read to imply” that a written dispute is required, the court wrote, a validation notice “cannot be unlawful merely because it allows for the same implication.”

In Riggs, after informing the plaintiff that the defendant would provide written verification if she notified him in writing that she disputed the debt, the defendant’s validation notice stated that he would assume the debt was valid if he did not “hear from [the plaintiff] within 30 days.” The Ninth Circuit rejected the plaintiff’s argument that the notice’s use of the phrase “[i]f I do not hear from you” violated the FDCPA because it could be interpreted in more than one way.

The Ninth Circuit found “it would be untenable to read the FDCPA to prohibit validation notices that simply mimic the statute’s own shortcomings.”

The court also observed that in all of the published cases it was aware of, the courts had found a violation of Section 1692g(a)(3) only based on a validation notice that expressly required a written dispute.

Ballard Spahr lawyers regularly consult with their clients engaged in consumer debt collection on compliance with the FDCPA and state debt collection laws. As summarized in a prior legal alert, the Consumer Financial Protection Bureau has issued a proposal to supervise certain debt collectors and debt buyers as “larger participants.” The CFPB will soon be examining debt collectors and debt buyers who qualify as “larger participants” or who act as service providers to entities supervised by the CFPB, such as payday and private student loan lenders. We are currently conducting compliance reviews for debt collectors and debt buyers in anticipation of their first CFPB examinations.

Ballard Spahr’s Consumer Financial Services Group produces the CFPB Monitor, a blog that focuses exclusively on important CFPB developments. To subscribe, use the link provided on the right. The group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).

For more information, please contact Practice Leader Alan S. Kaplinsky, 215.864.8544 or; Practice Leader Jeremy T. Rosenblum, 215.864.8505 or; John L. Culhane, Jr., 215.864.8535 or; Mercedes Kelley Tunstall, 202.661.2221 or; Barbara S. Mishkin, 215.864.8528 or; or Mark J. Furletti, 215.864.8138 or

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