The Fourth Circuit of Appeals in North Carolina ruled Friday that a previously dismissed class action case centering on language in collection letters should be returned to the district court for further action.
Clark et al. v. Absolute Collection Service (ACS) had been dismissed by a North Carolina district judge in early 2013. The two defendants, a married couple, had defaulted in 2011 on two separate medical debts from the same medical office.
The Clarks sued ACS for Fair Debt Collection Practices Act (FDCPA) violations after claiming that the collection agency violated their right to challenge their debt orally under section 1692g(a)(3) of the FDCPA. They said the collection notice stated that the debt would be "assumed valid unless disputed in writing."
ACS had sent two initial letters to the couple with the following validation notice:
ALL PORTIONS OF THIS CLAIM SHALL BE ASSUMED VALID UNLESS DISPUTED IN WRITING WITHIN THIRTY (30) DAYS; IN WHICH CASE, VERIFICATION OF THE DEBT OR A COPY OF THE JUDGMENT WILL BE PROVIDED TO YOU. IF THE ORIGINAL CREDITOR IS DIFFERENT FROM THE ABOVE NAMED CREDITOR, THE NAME OF THE ORIGINAL CREDITOR WILL BE PROVIDED UPON REQUEST.
ACS moved to dismiss the case arguing that section 1692g(a)(3) contains an inherent writing requirement.
The district court judge agreed and said allowing an oral dispute of the validity of a debt would leave consumers with fewer protections and in a potentially more confusing state than if one in writing is required.
But the Fourth Circuit panel disagreed with that ruling and cited two other conflicting rulings. The Fourth Circuit thus found that the FDCPA clearly defines communications between a collector and consumers. Sections 1692g(a)(4), 1692g(a)(5), and 1692g(b) explicitly require written communication, whereas section 1692g(a)(3) plainly does not.