Oral vs. Written: How to Handle Debt Collection Disputes

In today’s collection environment, disputed collections and inaccurate information are influencing the collection process at an alarming rate. The dispute process is viewed by many debtors as a loophole to get out of a debt that they rightly owe, but it also allows for a reasonable way for people to call out collection companies who are not using completely accurate information.

Regardless of which side of the fence you find yourself on, the process of handling a dispute on a collection account is an altogether confusing matter. There have been a number of court rulings that have led to a very difficult to understand set of guidelines as to the proper method of disputing a debt.

Mobile Bill Collection Case

A recent case addressed a situation where a debt collection company was attempting to collect an outstanding debt from a T-Mobile bill in the amount of approximately $300. During the collection process, the debtor orally disputed the debt during a conversation over the telephone.

The debtor argued that orally disputing the debt was within the guidelines of the FDCPA and that the collection should have ceased at that point until the debt was proven to be accurate. They argued that since the debt collector continued to make collection calls after that point, they were in violation of the FDCPA.

The judge ruled that the debt collection company had properly informed the debtor that any dispute must be made in writing and had used the appropriate language in the original collection letter that was sent to the debtor. This ruling appears to go against the wording of the FDCPA.

Dispute Your Collections in Writing

So what can we learn from this case? First and foremost, we need to understand that any legal situation is going to be open to interpretation by the judge presiding over the case. This means that even if the FDCPA states that collection disputes can be made orally, it is in your best interest to also file a written dispute.

Had the debtor in this case also filed a written dispute, the judge would have been forced to rule against the debt collection company for continuing to make collection calls after the debt was disputed. If you are being contacted by a debt collection agency about a debt you do not believe to be accurate, you should make every attempt to dispute the debt in every way possible.

Handling Disputes in Your Collections

If you are on the other side of the collections business, you might want to look at this case from a different perspective. The rules and regulations surrounding the debt collection industry are tough, and you don’t want to ever find yourself on the wrong side of the FDCPA.

In order to make sure that you are following the FDCPA by anyone’s interpretation of the language, you should respect any type of dispute, whether it be oral or written. You should actually be prepared to provide accurate proof of the debt well before the debtor even brings up the dispute. That’s just good business.

Regardless of whether you find yourself on the side of the debtor or the debt collector, it is important to always make certain that your position is absolutely clear to the other party. For the debtor, this means disputing a debt in writing. For the debt collector, it means respecting an oral dispute. That will ensure that you are always standing on solid legal footing with respect to your collection activities.

By | 2017-05-10T14:42:30+00:00 February 18th, 2015|Blog|0 Comments

About the Author:

Graduated from University of Utah - business degree 1990. Served in US Army as an interrogator / linguist, then as a tactical intelligence officer - Military Intelligence 1986-1990. Managed Western US sales operations for NY based collection agency 1990-1992. Founded Direct Recovery Associates, Inc. 1992-present