Considering "an issue of first impression" in the United States Court of Appeals for the Second Circuit and reversing the trial court’s order of dismissal, the Second Circuit ruled the Fair Debt Collection Practices Act does not require debtors to dispute the validity of the debt in writing, and so a debt collection notice likewise could not require the borrower’s response to be in writing. Plaintiffs filed a class action alleging that a debt collector violated the FDCPA by requiring them to submit any dispute of the validity of the debt in writing and could not be made orally. Defendant, a debt collector, moved to dismiss the class action. The lower court granted the motion and plaintiffs appealed.
The Second Circuit compared the conflicting rulings of the Third and Ninth Circuits on the issue, finding more persuasive the Ninth Circuit’s view that the FDCPA requires no writing from the debtor to dispute the validity of a debt. The Second Circuit ruled that Congress created "a sensible bifurcated scheme" that required a writing from the borrower to invoke more burdensome rights (such as demanding cessation of debt collection activities) than for other, less burdensome requests (such as disputing the validity of the debt). Thus, "[d]ebtors can protect certain basic rights through an oral dispute, but can trigger a broader set of rights by disputing a debt in writing." Notably, the Second Circuit rejected the debt collector’s argument that the ruling should have only prospective application.