debt-collection letters from a law firm violated the federal Fair Debt
Collection Practices Act ("FDCPA"), despite a disclaimer of attorney
involvement included in the letters, because the letters could lead the
recipient to believe that the law firm might take legal action to collect
the debt even though the law firm was not acting in its legal capacity
when it sent the letters.
A copy of the opinion is available at:
http://www.ca3.uscourts.gov/opinarch/103194p.pdf.
This appeal arose from two debt-collection letters sent by a law firm (the
"Law Firm") to a debtor, Darwin Lesher ("Lesher"), on behalf of a
third-party lender. The first letter was printed on the Law Firm's
letterhead and contained statements that the Law Firm was handling the
account and was authorized to settle the debt. The first letter also
included instructions to send all payments to the Law Firm and to "see
reverse side for important information."
On the reverse side, and among debt validation notice language, was a
disclaimer that "no attorney with this firm has personally reviewed the
particular circumstances of your account." Similarly, the second
debt-collection letter identified the Law firm as the sender, offered
Lesher the opportunity to settle the debt, and also instructed Lesher to
"see the reverse side for important information." The reverse side of
the second letter set forth disclosures and disclaimers identical to those
in the first letter.
In his complaint against the Law Firm, Lesher alleged that the letters
violated various provisions of the FDCPA by misleading him to believe that
an attorney was involved in collecting the debt and could take legal
action against him to collect on the debt. See 15 U.S.C. §1692e ("section
1692e"). The district court held that the letters violated section 1692e
because they implied that an attorney was involved in the collection
process and "implicitly threatened legal action." The Third Circuit
agreed.
After reviewing a series of court opinions that address debt-collection
letters sent by attorneys as well as non-attorneys, the Court noted that
the key to compliance with section 1692e on this issue is not to be
misleading about attorney involvement in the debt collection process.
Specifically, a disclaimer must "state clearly, prominently, and
conspicuously that although the letter is from a lawyer, the lawyer is
acting solely as a debt collector and not in any legal capacity when
sending the letter." Gonzalez v. Kay, 577 F.3d 600 (5th Cir.
2009)(attorney "[d]ebt collectors acting solely as debt collectors must
not send the message that a lawyer is involved").
In this case, the Third Circuit agreed with the district court that the
letters violated section 1692e's "general prohibition against 'false,
deceptive, or misleading' communications, because they falsely impl[ied]
that an attorney, acting as an attorney, [was] involved in collecting
Lesher's debt." The appellate court opined that "the least sophisticated
debtor, upon receiving these letters, may reasonably believe that an
attorney has reviewed his file and has determined that he is a candidate
for legal action."
Moreover, in the Court's view, the disclaimers on the back that no
attorney reviewed the account did not make clear that the Law Firm was
acting solely as a debt collector and not in any legal capacity in sending
the letters. The Court also pointed out that the disclaimers on the back
actually contradicted the "impression of potential legal action" given by
the front of the letters, and that the statutorily required statement that
the letters were "from a debt collector" did not change the impression
that the letters were from an attorney.
The Court limited its decision to the two specific letters in question,
and declined to address generally whether an attorney debt-collector who
sends a collection letter on attorney letterhead might comply with the
FDCPA by including language that makes clear that the attorney was not
acting in any legal capacity when the letter was sent.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
Mobile: (312) 493-0874
Email: RWutscher@mtwllp.com
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