The U.S. Court of Appeals for the Seventh Circuit recently affirmed judgments in favor of several debt collectors in cases brought pursuant to 15 U.S.C. § 1692g(a)(4) of the federal Fair Debt Collection Practices Act (“FDCPA”).
In so ruling, the Seventh Circuit held that collection letters to debtors which stated that “[i]f you notify this office within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification,” but omitted the specific phrase “that the debt, or any portion thereof, is disputed,” did not violate the FDCPA because any written request for verification of the debt constitutes a dispute for the purposes of the FDCPA.
Additionally, the Seventh Circuit held that the statement in a collection letter that “[w]e believe you want to pay your just debt” does not violate the FDCPA because it is mere puffery.
A copy of the Court’s opinion is available at: Link to Opinion
This action primarily concerns whether a letter sent to a debtor to collect a debt must include the language in 15 U.S.C. § 1692g(a)(4) “that the debt, or any portion thereof, is disputed.”
Four plaintiffs brought suit against four separate defendants alleging that similar debt collection letters were sent in violation of 15 U.S.C. § 1692g(a)(4) of the FDCPA.
Between 2012 and 2013, the plaintiffs received letters from the defendants that read, in pertinent part, as follows:
“Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification.”
The Seventh Circuit noted that the first sentence of this letter is an attempt to comply with 15 U.S.C. § 1692g(a)(3), which requires the debt collector to include “a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.”
The Court also noted that the second sentence is an attempt to comply with 15 U.S.C. § 1692g(a)(4), which requires the debt collector to include a “statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.”
The plaintiffs asserted that the letter does not adequately provide the notice required by 15 U.S.C. § 1692g(a)(4).
Because the second sentence in the notice omits the phrase “that the debt, or any portion thereof, is disputed,” the plaintiffs contend that it directs the consumer to request verification instead of directing the consumer to dispute the debt. In other words, under the plaintiffs’ theory, the second sentence should have read, “[i]f you notify this office within 30 days from receiving this notice that you dispute the debt or any portion of the debt, this office will obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification.”
Additionally, one of the consolidated plaintiffs’ letters contained the statement: “[w]e believe you want to pay your just debt” immediately preceding the notice language above. The plaintiff alleged that using the phrase “just debt” is misleading and improperly suggests that the debt’s validity has been confirmed.
The district courts dismissed all four actions for failure to state a claim. The plaintiffs appealed, and this consolidated appeal followed.
At issue in the appeal was whether defendants’ letters to the plaintiffs violated 15 U.S.C. § 1692(g)(a)(4).
As you may recall, FDCPA claims are evaluated under the objective “unsophisticated consumer” standard. However, under Seventh Circuit law, an unsophisticated consumer is not the least sophisticated consumer. Zemeckis v. Global Credit & Collection Corp., 679 F .3d 632, 634 (7th Cir. 2012).
The plaintiffs argued that because the second sentence of the defendants’ letters omits the phrase “that the debt, or any portion thereof, is disputed,” it creates the risk that an unsophisticated consumer who may wish to exercise their rights would fail to properly do so because they might be misled to request verification instead of disputing the debt.
The Seventh Circuit had little trouble rejecting this argument because “the consumer can, without giving a reason, require that the debt collector verify the existence of the debt before making further efforts to collect it.” DeKoven v. Plaza Assocs., 599 F. 3d 578, 582 (7th Cir . 2010).
According to the Court, any consumer that wrote and sought verification of a debt would be disputing the debt for the purposes of the FDCPA and would be entitled to all of the same protections under the FDCPA as if they had written to dispute the debt. Thus, the Court held, a request to verify the existence of a debt constitutes a “dispute” under the FDCPA.
One of the plaintiffs also argued that because the statement “[w]e believe you want to pay your just debt” appears immediately before the obligatory 15 U.S.C. § 1692g language, it overshadows and is inconsistent with the notice, rendering the letter misleading in violation of the FDCPA. Alternatively, the plaintiff argued that the phrase “just debt” implies that judgment has already been rendered against the recipient of the letter.
The Seventh Circuit also found this argument unavailing. The Seventh Circuit determined that the cases the plaintiff cited in support of this argument are distinguishable because they involved notices containing incoherent and contradictory language.
For example, in Avila v. Rubin, 84 F .3d 222 (7th Cir . 1996), the disputed notice informed the consumer of their right to dispute or verify the debt. However, the notice was followed by the language “[i]f the above does not apply to you, we shall expect payment … within ten (10) days from the date of this letter .” Id. at 226. Thus, “telling a debtor he has 30 days to dispute the debt and following that with a statement that ‘[i]f the above does not apply’ you have ten days to pay up or real trouble will start is entirely inconsistent” with the FDCPA. Id.
Similarly, in Chuway v. Nat. Action Fin. Servs, Inc., 362 F .3d 944 (7th Cir . 2004), the issue was whether the letter clearly stated the amount of the debt that the debt collector was attempting to collect. The letter stated the balance was $367.42. However, the letter also directed the consumer to call a 1-800 number to obtain current balance information. The letter was confusing to the unsophisticated consumer because its reference to the “current balance” could be interpreted to mean that the debt collector was trying to collect a debt higher than $367.42 that could only be discovered by calling the 1-800 number. Here, plaintiffs do not allege that the amount of the debt is unclearly stated.
Thus, the Seventh Circuit held that a letter containing the statement “[w]e believe you want to pay your just debt” does not direct the consumer to take any action at all. Instead, the Court held, it merely characterizes the debt as “just.” Considered in the context of the letters in this record, the phrase “just debt” is simply a congenial introduction to the verification notice and is best characterized as “puffing, in the sense of rhetoric designed to create a mood … .” Taylor v. Cavalry Inv., LLC, 365 F. 3d 572, 575 (7th Cir. 2004). Mere puffery does not violate § 1692g(a)(4). Id. Consequently , the statement “[w]e believe you want to pay your just debt” does not violate the FDCPA.
Thus, the Seventh Circuit held that the defendants’ notices to the plaintiffs did not violate 15 U.S.C. § 1692g(a)(4) of the FDCPA because any written request for verification of the debt constitutes a dispute for the purposes of the FDCPA. Furthermore, the Court held that the statement “[w]e believe you want to pay your just debt” does not violate the FDCPA because it is mere puffery.
Accordingly, the Seventh Circuit affirmed the judgments entered for the defendants.
Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
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Email: RWutscher@mwbllp.com
Admitted to practice law in Illinois
McGinnis Wutscher Beiramee LLP
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