Opinion ID: 2650
Heading Depth: 3
Heading Rank: 1

Heading: The Right to Dispute the Debt Before Payment

Text: Plaintiff contends first that the letter might lead the least sophisticated consumer to be uncertain whether she had any right to dispute the debt at all before paying it. If that were the case, the letter would violate § 1692g(a) under the well-established law of this Court. Like the district court, however, we find no violation of the Act on this score. As noted above, a debt collector is, as a general matter, entitled to demand immediate payment of a debt, and to threaten further action in the event of non-payment. Our cases have recognized, however, that such demands may cause confusion about the right to dispute, and will sometimes, in that way, lead debt collectors to run afoul of the Act. In Russell v. Equifax , for example, a debt collection agency sent a letter captioned as an immediate collection notice, telling the consumer if you do not dispute this claim (see reverse side) and wish to pay it within the next 10 days we will not post this collection to your file. 74 F.3d at 32. On the reverse side of the letter, there was a validation notice accurately stating the nature of the recipient's right to dispute the debt. Id. Twenty days later, the debt collector sent another letter, demanding payment in full within 5 days. Id. at 33. We found that both communications violated the FDCPA. While the collector was technically within its rights to demand payment, the least sophisticated consumer would be left uncertain whether she had the option to dispute the debt, and to withhold payment while disputing it. Id. We elaborated on our approach to this kind of claim in Savino v. Computer Credit, Inc., 164 F.3d at 85-86. There, the front of the letter stated that the creditor insists on immediate payment or a valid reason for your failure to make payment. Id. at 84. At the bottom, the letter also referred to an IMPORTANT NOTICE ON BACK, where the information required by § 1692g(a) could be found. Id. The Savino court held that the notice violated the FDCPA. By demanding immediate payment on the front, and only informing the debtor of his right to dispute on the back, the notice, we concluded, would leave the least sophisticated consumer uncertain as to her right to dispute the debt. Id at 85-86. Jacobson claims that the actual holding of Savino is that an immediate demand for payment violates the Act even when it is presented with an alternative. Appellant's Br. at 11. We disagree; the Savino panel stressed that a request for immediate payment d[oes] not, standing alone, violate the FDCPA. Savino, 164 F.3d at 85-86. Indeed, the Savino court went further and provided examples of transitional language designed to call attention to a validation notice, which would still allow a debt collector to demand immediate payment while complying with the Act. Id. at 86. That the debt collector in Savino itself violated the Act by requiring immediate payment without also explaining that its demand did not override the consumer's rights under Section [1692g] to seek validation of the debt, id. (emphasis added), in no way supports Jacobson's extreme position. The letter sent by HFS to Jacobson, though it demanded payment, adequately explained that the recipient had the right to seek verification of the debt. It presented Jacobson with two alternate ways of avoiding further action: either pay the debt within 30 days, or submit a notice of dispute, within 30 days. This right to seek validation of the debt was further explained, not on the back of the demand letter, but on its face, below the initial statement, and in clear terms. In these circumstances, even the least sophisticated debtor would understand that she had the option to submit a notice of dispute, rather than pay the claimed sum. We therefore affirm the district court's decision, to reject Jacobson's first argument.