The Fair Debt Collection Practices Act (15 U.S.C. Section 1692(g)(a)(3) and (4)) has two different notice issues in it. Section 1692(g)(a)(3) requires a creditor to give notice to the debtor of their right to dispute the debt–however that section does NOT require that the debtor to put the dispute in writing!
The next section, 1692(g)(a)(4) is the confusing part–if a debtor notifies a creditor in writing that he or she disputes that debt, then the creditor must verify the debt and respond as required by the statute.
One law firm (lender) missed this distinction and got roped into prolonged litigation. In Jerman v. Carlisle, a law firm and one of its attorneys filed a lawsuit in Ohio state court on behalf of a mortgage company to foreclose a mortgage on the borrower (Jerman). The complaint included a notice requiring the borrower to dispute it the debt in writing. The borrower did so, the law firm established the debt has been satisfied and then the borrower turned around and sued the law firm for requiring her to dispute the debt in writing.
The law firm made a common mistake and did not really understand the way the FDCPA code sections worked, and sought relief under the “bona fide error” defense. However, ignorance of the law is not a great defense and so the Supreme Court concluded that none of the codified sections that could have saved the law firm (these sections are identical to the provisions in the Truth in Lending Act) applied. The holding meant that the borrower’s case could proceed against the lawyer.
The reality is the damages may be de minimis–but failure to adhere to the letter of the law here really hurt the creditor and creditor’s counsel.