Disputes Under FDCPA Need Not Be in Writing: Brady

This folder examines the dispute process whereby the consumer contests the alleged debt and whether the dispute may be oral or only in writing.
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David A. Szwak
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Disputes Under FDCPA Need Not Be in Writing: Brady

Post by David A. Szwak »

FDCPA does not impose writing requirement on consumer disputing debt
Law Reporter, Apr 1999

Brady v Credit Recovery Co., 160 F.3d 64 ( lst Cir. 1998).

The First Circuit Court of Appeals held that (sec)1692e(8) of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. (sec)1692 et seq., does not impose a writing requirement on a consumer disputing a debt. That section provides that a debt collector's failure to disclose a debt's disputed status is a misleading representation in violation of the FDCPA.

Here, Brady's wife leased an apartment listing Brady as a tenant and then defaulted on the rent. A collection agency sought payment from Brady, who called the agency's president disputing his obligation on the debt. The president told him to submit the dispute in writing, which Brady never did. About five years later, he applied for a home mortgage. The collection agency reported the unpaid rent as an outstanding debt to the mortgage company without also reporting its disputed status, thus jeopardizing Brady's financing.

He sued the collection agency and its president, alleging failure to inform the mortgage company of the debt's disputed status, in violation of FDCPA (sec)1692e(8), among other claims. The trial court dismissed plaintiff's claims.


Reversing, the Second Circuit rejected defendants' argument that (sec)1692e(8) imposes a writing requirement on a consumer who disputes a debt, noting that the ordinary definition of the word "dispute," does not contemplate a writing. The court said that although (sec)1692g(b) of the FDCPA requires a consumer's written dispute to stop all debt collection activity, (sec)1692e(8) does not affect debt collection practices at all. The court noted that given the much more limited effect of 1692e(8), Congress's decision not to condition its exercise on written notification is logical. Moreover, the fact that other sections of the FDCPA explicitly impose a writing requirement suggests that Congress's omission of such a requirement in (sec)1692e(8) was intentional.

The court said that if it were to apply the writing requirement under (sec)1692g(b), it would also have to apply its 30-day notification provision. Under (sec)1692e(8), a debt collector must communicate the disputed status of a debt when it knows or should know the debt is disputed. Thus, the court reasoned, application of the notification provision would render the "knows or should know" language of (sec)1692e(8) superfluous.

Accordingly, the court remanded.
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