How does a debt collector determine what must be done when a consumer disputes a debt? This is an important question for both new and experienced debt collectors.

While it may seem simple at first, the requirements of federal law add deeper dimensions to the issue.

Reviewing the nature of what constitutes a dispute, duties triggered by disputes and concerns regulators have about how disputes are handled are all important considerations when building effective policies and procedures for handling and responding to disputes.

The Fair Debt Collection Practices Act requires debt collectors to inform consumers that they have the right to dispute the validity of the debt. Section 809(a)( 3) specifically states that within five days of the initial communication, the debt collector must send a letter containing, among other things, “a statement that unless the consumer, within 30 days after receipt of the notice, disputes that validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector[.]” Section 809(a)( 4) states that “if the consumer notifies the debt collector in writing within the 30-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…” (emphasis added).
Courts have examined the
requirements of these two sections of
the FDCPA and found both verbal
and written disputes are valid forms of
dispute under the act. To this point,
a majority of courts have stated that
disputes do not need to be made in
writing, and can be written or verbal.

While both verbal and written disputes are permissible, the FDCPA triggers different duties depending on the type of dispute. Therefore, it is important for collectors to be able to identify and properly respond to both written and verbal disputes.

Identifying Disputes

In order to effectively respond to
disputes, a collector first needs to know
what constitutes a written or verbal
dispute. Disputes can take different
forms, and some are more easily
identified than others. Sometimes a
dispute will be clear-cut, such as the
consumer directly stating, “I dispute
this debt.” Other times, a dispute
may be more subtle, such as when a
consumer says, “I don’t recall making
this purchase.”
Either statement could be
characterized as a dispute, because in
each instance the consumer is calling
into question the validity of the debt.
Because consumers do not need to
not use the precise word “dispute,”