Recent Case Provides Disputes Do Not Have to be in Writing

I started the week discussing case law that did not have a
favorable result for consumers so I figure it a good idea to
following it up with a recent appellate decision that ends on a
positive note.  In the case of Hooks v. Forman, Holt Eliades
Ravin LLC, plaintiffs Karen Hooks and Geraldine Moore filed suit
against a collection agency alleging violations of the Fair Debt
Collection Practices Act (“FDCPA”) when a collector sent a notice
to the consumers stating they could only dispute
the validity of the debt in writing
, violating Sections
1692a(6) and 1692g.  Initially, the case was dismissed, but on
appeal the order of dismissal was vacated and the case was
reinstated . 

The facts of the case begin in December of 2009 when the
plaintiffs, Karen Hooks (“Hooks”) and Geraldine Moore (“Moore”),
visited Atlantic City, New Jersey and attended a time share
presentation with Wyndham Vacation Resorts, Inc. (“Wyndham”). 
At the end of the presentation Hooks and Moore signed an agreement
with Wyndham to purchase a timeshare but did not realize that the
document they were signing was a mortgage application.  Hooks
and Moore never made a single payment on the timeshare.  After
not receiving payment, Wyndham hired Forman Holt Eliades Ravin LLC
(“Forman”) to collect the timeshare debt from Hooks and
Moore.  On April 5, 2011, Forman sent an initial collection
letter to the Plaintiffs at their home address.  The letter
read as follows: 

UNLESS YOU NOTIFY U.S. IN WRITING WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF THIS LETTER THAT THE DEBT, OR ANY PART OF IT, IS
DISPUTED, WE WILL ASSUME THAT THE DEBT IS VALID. IF YOU DO NOTIFY
U.S. OF A DISPUTE, WE WILL OBTAIN VERIFICATION OF THE DEBT AND MAIL
IT TO YOU. ALSO UPON YOUR WRITTEN REQUEST WITHIN THIRTY (30) DAYS,
WE WILL PROVIDE YOU WITH THE NAME AND ADDRESS OF THE ORIGINAL
CREDITOR IF DIFFERENT FROM WYNDHAM.

After receiving the collection letter Hooks and Moore filed suit
in the District Court for the Southern District of New York,
alleging that the collection letter failed to comply with
15 U.S.C. § 1692g
.  This section requires a debt collector
to send written notice to consumers within 5 days of verbal
communication.  Section 1692g(a)(3) requires that this notice
contain “a statement that unless the consumer, within thirty days
after receipt of the notice, disputes the validity of the debt, or
any portion thereof, the debt will be assumed to be valid by the
debt collector.”  Hooks and Moore argued that the notice
violated § 1692g(a)(3) because it indicated that a
request for validation
of the debt must be made in writing and
cannot be verbal.

Forman filed a motion to dismiss the complaint and its motion
was granted when the court stated the collection agency did not
violate the FDCPA by stating disputes must be made in
writing.  Hooks and Moore appealed the decision and in May of
2013, the appeals court vacated the dismissal.  In its
opinion, the appeals court stated the language of the statute does
not have a written requirement as it does in other sections of the
same statute.  “The right to dispute a debt is the most
fundamental of those set forth in § 1692g(a), and it was reasonable
to ensure that it could be exercised by consumer debtors who may
have some difficulty with making a timely written challenge.” 
The Court went on to state, “[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.”

If you are having issues with debt collection or need more
information on your rights, contact
SmithMarco P.C
. for a completely free case review.