In Case of First Impression Florida District Court Holds that Collection Letter Sent by Law Firm Violated Federal Fair Debt Collection Practices Act (FDCPA) Because it Told Debtor that Validity of Debt could be Disputed Only in Writing
Plaintiff opened an American Express Centurion credit card account. American Express retained a law firm to collect amounts owed on the account. The law firm sent a “Dunning letter” that stated, in pertinent part, that the debtor had to “notify this office in writing within thirty days after receiving this notice that you dispute the validity of the debt.” Baez v. Wagner & Hunt, P.A., 442 F.Supp.2d 1273, 1274 (S.D. Fla. 2006) (italics added by court). Plaintiff filed a class action against the law firm alleging that the collection letter violated Section 1692g of the federal Fair Debt Collection Practices Act (FDCPA) by requiring that the validity of the debt be disputed in writing, and defense attorneys moved to dismiss the complaint. Id., at 1274-75. The basis of the lawsuit is that Section 1692g(a)(3) requires that a debt collection letter notify the debtor that the debt will be assumed valid unless the debtor disputes the validity of the debt within 30 days. Sections 1692g(a)(4) and (a)(5), however, reference written notifications from the debtor disputing the debt. Defendant argued that its Dunning letter simply “provided [plaintiff] with additional guidance for disputing the debt and avoided confusion by reconciling the notification requirement in subsection (a)(3) with the writing requirement contained in subsections (a)(4) and (a)(5).” Baez, at 1275-76. The district court disagreed.
The federal court noted that “Whether a Dunning letter that requires a consumer to dispute a debt in writing violates the FDCPA is a question of first impression in this Circuit.” Baez, at 1276. The only circuits to address the issue – the Third Circuit and the Ninth Circuit – have reached different conclusions: the Third Circuit held that subsection (a)(3) requires written notice, see Graziano v. Harrison, 950 F.2d 107, 112 (3d Cir. 1991), while the Ninth Circuit held that written notice is not required, see Camacho v. Bridgeport Fin., Inc., 430 F.3d 1078, 1080-81 (9th Cir. 2005). In agreeing with the Ninth Circuit’s analysis, the district court concluded that the plain language of the statute does not require that the validity of the debt be disputed in writing, and refused to add that requirement to the statute. Baez, at 1277.
The district court also refused to give the law firm the benefit of a “good faith” defense based on the fact that Camacho issued after the firm sent the collection letter. The court explained at page 1277, “By including the phrase ‘in writing’ in its letter to [plaintiff], [the law firm] violated the plain meaning of the statute.” The fact that district courts disagreed on the proper interpretation of Section 1692g(a)(3) was not an excuse for the law firm to alter the language contained in the statute. Id.