Just yesterday, insideARM published an open letter to the Consumer Financial Protection Bureau (CFPB) regarding a legal issue that has percolated over the past year or so in the Eastern District of Pennsylvania and the District of New Jersey. Decisions from these courts are doing two things: (1) finding that a validation notice that tracks the statutory language of the Fair Debt Collection Practices Act (FDCPA) might very well violate the FDCPA, and (2) reading an "in writing" requirement into subsection (a)(3) where none exists.

The Eastern District of Pennsylvania recently released yet another decision on the issue in the case of Henry v. Radius Global Solutions, LLC, No. 18-cv-4945 (E.D. Pa. Jan. 18, 2019)

Factual and Procedural Background

The facts in this case are similar to all other cases on this issue. There is nothing out of the ordinary in the way the debt was collected. At issue is the validation notice language used by the debt collector in its initial letter to the plaintiff. The letter, using identical language to the requirements listed in section 1692g of the FDCPA, states:

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 after 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 of 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 alleges that this notice “ambiguously described how she could dispute this debt” because the first sentence doesn’t notify her how to dispute the debt nor does it describe what happens if the debt is disputed orally. In response, the debt collector filed a motion to dismiss, which the court denied.

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The Court’s Decision

The court begins its decision with a paragraph summarily stating that the Third Circuit reads an “in writing” requirement to disputes made under 1692g (a)(3). In analyzing the Third Circuit's decision in Graziano v. Harrison, the court mentioned that Graziano does not state that a debt collector must include the words “in writing” for subsection (a)(3) -- although doing so does not violate the FDCPA. Instead, Graziano holds that in order for a debtor's dispute under subsection (a)(3) to be valid, it must be in writing. Despite agreeing with Gratziano that the words "in writing" are not required, the court found that plaintiff sufficiently stated an FDCPA claim because not including "in writing" does not sufficiently describe the consumer's rights. (Editor's Note: Doesn't that in effect make it a requirement?)

The court then went on to discuss the issue of including “if” in the second sentence of the validation notice, which is also included in the statutory language. Despite the court agreeing that the debt collector’s interpretation -- that “if” is a condition -- may be true, the court found that it could not rule out the possibility that the least sophisticated consumer might consider “if” as an option. If “if” is an option, then the letter can be read as allowing both oral and written requests for verification of debt. The court suggests that substituting “if” with “unless” (“Unless you notify this office in writing within 30 days…”) would be better.

Oddly enough, the court found that 1692g is not vague despite acknowledging that even judges within its own circuit have come to different conclusions on the issue. As a word of caution, the court cites the recent Durnell v. Stoneleigh Recovery Associates, LLC case, referenced in yesterday’s open letter, which states that adding the “in writing” language to subsection (a)(3) might run the debt collector afoul in other jurisdictions that do not read an “in writing” requirement into subsection (a)(3). The court also acknowledges that it disagrees with another late judge in its circuit on the “if” issue. One of the court’s main arguments in finding that the statute is not vague is simply the fact that it has never been questioned for its constitutionality despite being reviewed countless times for other issues.

insideARM Perspective

According to statutory interpretation principles, courts are first supposed to look to the plain meaning of the statute. Only if there is ambiguity or vagueness can the courts expand the scope. Many times in the past, courts throughout the country have found that if Congress explicitly included a certain requirement in some sections of a statute but not in others, then the exclusion was intentional and the requirement should not be read into those sections.

This issue is a perfect example. 

A plain reading of the statute indicates that a consumer has three separate options under section 1692g of the FDCPA:

  • To dispute the debt (in any manner) within thirty days or else the debt collector will deem it valid.
  • To request verification of the debt, which must be requested in writing within thirty days.
  • To request the name and address of the creditor, which must also be requested in writing within 30 days.

The thirty day requirement is very clearly present in all three options, yet the written requirement is not. Congress explicitly included a written requirement for subsections (a)(4) and (a)(5), yet there is no mention of it in subsection (a)(3). By excluding the written requirement from one of the three subsections (and by not doing the same with the thirty day requirement), it can be concluded that Congress did not intend subsection (a)(3) to have a written requirement, thus affording consumers the ability to dispute the validity of debts (without requesting verification) both orally and in writing. 

Instead, these court decisions seem to indicate that these options -- or at least the first two -- are one and the same, forming a hybrid option where none exists in the statute. As a result, the Third Circuit and its subordinate courts have effectively restricted their consumers' options for disputing debts,

The silver lining out of all of this is that there is a clear jurisdictional split on the issue, which creates an avenue for U.S. Supreme Court review. A Supreme Court decision would settle the issue once and for all, requiring all courts in the United States to follow its decision. While the path to Supreme Court review is long and not guaranteed, the universal applicability of a Supreme Court decision on this issue would provide much needed clarity for debt collectors who are in good faith trying to comply with the law, especially those who collect in multiple jurisdictions.


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