The federal Fair Debt Collection Practices Act provides a host of protections against harassment and abuse by debt collectors. One provision permits the debtor to dispute the debt, a step that requires the debt collector to verify the debt before continuing collection activities. Another provision prohibits the collection of debts using false or misleading representations or means to collect. Late last week, the Fourth Circuit rejected the argument that a debtor must avail herself of the dispute provision in order to enjoy the FDCPA's other protections. Although this point should seem obvious, this is not the first time an FDCPA defendant has tried to argue that a debtor must dispute the debt to bring claims under other FDCPA provisions, so it's good to see an opinion squarely rejecting the theory.
On top of the fact that the statutory language does not support the theory, the facts of the case illustrate why the theory makes little sense. Diane Russell received a letter from Absolute Collection Services about an unpaid medical bill, and three weeks later, she paid the creditor in full. Nonetheless, Absolute continued to pursue her for months after the payment. Absolute eventually threatened to report the supposedly unpaid debt to the credit bureaus and thereby damage Russell's credit. Russell's problem was not that she didn't owe the debt — it was that Absolute continued to go after her after she paid it. So disputing the validity of the debt within 30 days of the initial collection letter (as the statute allows) wouldn't have made sense. The Fourth Circuit wisely held that Russell did not need to take this step, and it affirmed a jury verdict in Russell's favor.
The case is Russell v. Absolute Collection Services.