When disputes arise in good faith from a debtor, what is the recommended sequence of actions?

• A. Pause collections to resolve the dispute, document, and continue collecting on undisputed portions, ensuring compliance
• B. Immediately pursue the debt in full and escalate to legal action
• C. Decline to engage and close the account
• D. Report the dispute to credit bureaus before any investigation

Answer: (A)

Handling disputes in good faith requires pausing collection activity on the disputed portion while continuing to address any undisputed amounts. This approach protects the debtor’s rights and keeps the process compliant, since you’re investigating the dispute rather than pressing for full payment without verification. Start by acknowledging the dispute in writing, then gather relevant documentation, verify account details, and determine the status of the disputed amount. Maintain a clear record of all communications and findings. If part of the debt is undisputed, you may continue collecting that portion while the dispute is being resolved, ensuring progress on the account. After the investigation, adjust the balance if the dispute is upheld and resume appropriate collection activity on any remaining amounts. Throughout, stay compliant with applicable laws and avoid threats, harassment, or reporting inaccurate information.

Pushing for the full amount or escalating without addressing the dispute can violate consumer protections, closing the account without investigation leaves the dispute unresolved, and reporting the dispute to credit bureaus before completing the investigation can lead to incorrect credit reporting.