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N.J. Judge Dismisses FDCPA Suit Over Dispute Notice in Letter

What? A District Court judge in New Jersey ruling that a collection agency did not violate the Fair Debt Collection Practices Act by failing to explicitly indicate that a dispute had to be filed in writing? Say it isn’t so.

Following a number of cases in which the defendant was denied a motion to dismiss or a motion for summary judgment after it was accused of violating the FDCPA by including the statutory dispute notice in a validation letter, a District Court judge in New Jersey has granted a motion to dismiss in a similar case.

A copy of the ruling in Smallwood v. Alltran Financial can be accessed by clicking here.

The plaintiff received a collection letter from the defendant in relation to an unpaid credit card debt. The letter included an offer to settle the debt for less than the full amount owed or to contact the defendant to discuss repayment options. The letter also included the following statement:

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 from 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 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.

The plaintiff filed suit, alleging the letter violated the FDCPA by failing to convey that the dispute had to be filed in writing. Citing Graziano v. Harrison as precedent for her claim that the dispute language must explicitly state that it has to be filed in writing, Judge William Walls disagreed. The plaintiff “misreads Graziano,” Judge Walls wrote. “That a validation notice may contain a writing requirement does not mean that it must. But this is the gravamen of Smallwood’s claim. Her challenge to the Letter under Graziano fails.”

Looking across the Third Circuit, there is no requirement that a letter must include a statement that a dispute has to be filed in writing, Judge Walls wrote.

“But though both opinions cited Graziano, neither required the validation notice to state, as Smallwood wants, that any dispute must be in writing. No such requirement exists in the Third Circuit.”

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