In a decision approve for publication, the United States Court of Appeals for the Third Circuit, sitting en banc, recently reversed its prior holding and held that a debt collection letter does not need to expressly state that the debtor must dispute the validity of the debt in writing under Section 1692g(a)(3) of the Fair Debt Collection Practices Act (“FDCPA”).  See Riccio v. Sentry Credit, Inc., 954 F.3d 582 (3d Cir. 2020).  The defendant debt collector sent the plaintiff a collection letter that stated:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice, that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

Plaintiff then brought this lawsuit, arguing that the letter violated the FDCPA by “fail[ing] to properly inform the least sophisticated consumer that to effectively dispute the alleged debt, such dispute must be in writing” under Third Circuit precedent.  The complaint specifically challenged the first sentence of the above-quoted notice, which did not say that the dispute notification be in writing.  Defendant filed a motion to dismiss, and the District Court granted the motion, finding that “[n]o additional language appears on the Collection Letter asking or suggesting to consumers a dispute of the debt may be made via telephone call.”  Plaintiff appealed this decision.

On appeal, however, the Third Circuit addressed the larger question about whether a debt collection letter is required to say that any challenges must be in writing, a requirement it previously mandated in Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991).  Section 1692g(a) of the FDCPA states that a debt collection letter must include 5 things:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) 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;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

In Graziano, the Third Circuit had held that the letter’s statement required under 1692g(a)(3) must say that the dispute be in writing, despite the fact that this provision does not mention any writing, unlike 1692g(a)(4) and 1692g(a)(5).

In this case, however, the Court reversed that prior holding based on the plain text of the statute.  It further found that “if the debtor disputes the debt, the collector must verify it at some point down the road. But (a)(4) and (b) [unlike (a)(3)] demand that if the debtor disputes the debt in writing, the collector must prove its validity immediately. . . . Put differently, inserting a writing requirement into (a)(3) means that every dispute triggers (a)(4) and (b). That simply can’t be right. If every dispute triggers (a)(4) and (b), then (a)(3) has no independent effect.”  In making this decision, the Third Circuit joined the Second, Fourth, and Ninth Circuits in their similar holdings.  “By expressing our view today, we put an end to a circuit split and restore national uniformity to the meaning of § 1692g.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.