FTC File No. P964811

FTC File No. P964811. Decision, March 31, 2000

RESPONSE TO THE REQUEST BY THE AMERICAN COLLECTORS ASSOCIATION FOR AN ADVISORY OPINION

This is in response to the American Collectors Association’s (“ACA’s”) request for two Commission advisory opinions (“Request”) regarding the Fair Debt Collection Practices Act (“FDCPA”), which the association submitted pursuant to Sections 1.1 - 1.4 of the Commission’s Rules of Practice, 16 C.F.R. §§ 1.1 - 1.4. The two issues will be addressed in the order in which they were presented.

FIRST ISSUE:

Does Section 809(b) of the FDCPA permit a collection agency to either demand payment or take legal action during the pendency of the thirty (30) day period for disputing a debt in situations where a debtor has not notified the collection agency that the debt is disputed?

[The] starting point in every case involving construction of a statute is the language itself.” Southeastern Community College v. Davis, 442 U.S. 397,405 (1979) (quoting Blue Chip Stamp v. Manor Drug Stores, 421 U.S. 723,756 (1975) (Powell, J., concurring)). The language of Section 809(b) provides that, ‘‘[i]f the consumer notifies the debt collector in writing within the thirty-day period” that the debt is disputed, the debt collector must cease collection of the debt until verification of the debt is obtained and mailed to the consumer1. Where Congress intended

Section 809(b), 15 U.S.C. § 1692g(b), provides: DEBT COLLECTION COORDINATION PROJECT 1993

Interlocutory Orders, etc.

that debt collectors cease their collection efforts during the thirtyday dispute period, it so specified: if, and only if, a consumer sends the debt collector a notice in writing. Congress did not specify that collectors must cease collection efforts during the dispute period even if consumers send nothing in writing.

The Commission has voiced this opinion in recent annual reports to Congress mandated by the FDCPA. As the Commission stated in the 1999 report, for example, “Nothing within the language of the statute indicates that Congress intended an absolute bar to any appropriate collection activity or legal action within the thirty-day period where the consumer has not disputed the debt.” Letter from Chairman Robert Pitofsky to the Honorable Albert Gore, Jr. regarding Twenty-First Annual Report to Congress Pursuant to Section 815(a) of the Fair Debt Collection Practices Act, at 10 (Mar. 19, 1999) (“1999 Annual Report”). Because there appears to be some confusion regarding whether the thirty-day period is a dispute period or a grace period, the Commission has recommended in recent annual reports that Congress clarify the FDCPA by adding a provision expressly permitting appropriate collection activity within the thirty-day period if the debt collector has not received a letter from the consumer disputing the debt. The Commission emphasized that the clarification should include a caveat that the collection activity should not overshadow or be inconsistent with the disclosure of

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof; is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor , is mailed to the consumer by the debt collector.