Can a Consumer Dispute a Debt Without Writing a Letter? | McCarthy Law PLC
June 24, 2013

Can a Consumer Dispute a Debt Without Writing a Letter?

Recently, the United States 2nd Circuit Court of Appeals held that the Fair Debt Collection Practices Act (FDCPA) does not require written notice of a disputed debt in order to be valid.

The case involved New York residents who purchased a timeshare from Wyndham. Neither resident realized they signed for a mortgaged timeshare. After no payments were made toward the mortgage, Wyndham enlisted the debt collection agency, Forman, Holt, Eliades & Ravin, LLC to collect on the debt. Forman Holt sent a notice to the residents stating “unless you notify us in writing within thirty (30) days…that the debt…is disputed we will assume that the debt is valid.”

The NY residents filed a lawsuit claiming that the letter violated the FDCPA, which they argued allows for consumers to dispute the debt orally or in writing.

The actual language of the FDCPA says that notice of a debt sent to a debtor must contain “a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.” Later in the act, the FDCPA also states that for a creditor to cease debt collection, the debtor must dispute the debt in writing.  Forman Holt argued that these two sections of the act should be read as one, leading to an interpretation that the dispute must be made in writing.

The court disagreed reasoning that the “right to dispute a debt is the most fundamental” part of the FDCPA — so fundamental that the court wanted to ensure that the right can be exercised as freely and easily as possible, noting that forcing a consumer debtor to make a challenge in writing is a deterrence for many and limits the debtors’ ability to dispute the debt.

In the end though, the court still held that in order for collection of the debt to cease altogether, written notice from the consumer debtor is required. Read more here:

If you have received notice of a debt from a debt collector, call a qualified debt settlement law firm that is experienced in working with debt collectors and is versed in the FDCPA. The attorney can advise you of your options if the debt is invalid or past the statute of limitations and help you stop the collection calls and emails. If the debt is valid, often the attorney can negotiate with the debt collector to settle the debt for a fraction of what is claimed due.

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