Debt Collector Loses FDCPA Appeal on Letter Language

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The Third Circuit Court of Appeals this month overturned a lower court ruling that favored a debt collection agency and revived a Fair Debt Collection Practices Act (FDCPA) claim that a district court had rejected.

At issue was language on a debt collection letter that could confuse “the least sophisticated consumer” into taking two different courses of action.

Plaintiff Ray Caprio received a collection notice on Dec. 7, 2010 from Healthcare Revenue Recovery Group, LLC (HRRG) to collect a debt incurred at a doctor’s office. The letter’s second paragraph read:

If we can answer any questions, or if you feel you do not owe this amount, please call us toll free at 800-984-9115 or write us at the above address. This is an attempt to collect a debt. Any information obtained will be used for that purpose. (NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION.)

On the reverse of the collection letter, HRRG had printed the following disclosures:

This is an attempt to collect a debt from a debt collection agency.  Any information obtained will be used for that purpose.

Pursuant to Sec. 809 of the Fair Debt Collection Practices Act, 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 in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will: obtain verification of the debt or obtain a copy of a judgement [sic] and mail you a copy of such judgement [sic] or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

Caprio filed suit against HRRG claiming a violation of the FDCPA. His contention was that a consumer could be confused by the second paragraph — specifically the phrase “please call” — on the front of the letter and call the toll free number to dispute the debt. All debt disputes must be in writing, however, as disclosed on the back of the letter.

The District Court concluded that the “please call” language, when read in the context of the entire Collection Letter as a whole, would not confuse the “least sophisticated debtor.”  New Jersey District Judge Dennis M. Cavanaugh wrote, “[t]he Collection Letter clearly and accurately sets forth all of the required validation notice language, and the language on the front does not overshadow or contradict that validation notice.”

The appellate court panel disagreed with that decision. According to the circuit court opinion, the collection letter was deceptive because “it can be reasonably read to have two or more different meanings, one of which is inaccurate.”

In its discussion of the case, the panel noted, “We do acknowledge that this ‘please call’ language could be read as nothing more than a mere invitation given other aspects of the Collection Letter. In fact, the District Court may be correct that ‘[a] more appropriate reading of the Collection Letter reveals that the language on the front of the letter reflects an invitation to communicate, and the validation notice on the back of the letter sets forth the Plaintiff’s rights.’”

But the Court noted that “it is not our responsibility to decide whether the debtor or the debt collector offers ‘a more appropriate reading’ of a debt collection letter. We instead must interpret the document from the perspective of ‘least sophisticated debtor.’” Under that standard, the appeals court said that the language in the second paragraph could be confusing and sided with Caprio.

The case was remanded to the district court for further proceedings.


Continuing the Discussion

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  • avatar JASON CASH says:

    I think Congress should amend the statute, deleting the phrase “least sophisticated” and replacing it with “astonishingly stupid”.

  • avatar Kevin J Hough says:

    Jason….I couldn’t have said it better! But lets include the Courts in the “Astonishingly stupid”.

  • avatar FriendoftheCourt says:

    Since the LSC standard is one defined by case law, the Congress would have difficulty deleting it…

    And so would the CPFB since, while they are the assigned regulator, they are stuck with the entire body of case law that attends the FDCPA. The CPFB also has no way of altering the statute.

    Sorry. The appeals court ruling is correct. Y’all need to reread CLOMON V. JACKSON, 988 F.2d 1314 (2d Cir. 1993)

  • avatar Commercial Guy says:

    Once again, I give thanks that the “least sophisticated debtor” that I have to deal with is just an astonishingly stupid business owner, who has to deal with the consequences of his stupidity without being able to hide behind the FDCPA.

  • avatar Collection Veteran Since 1964 says:

    The decision to be creative, regardless of intent, to use non-conforming language in a first notice and then to spend the legal fees to defend the lawsuit only raises one question-why? I wonder if the defense lawyer was the same attorney who said it was OK to use the language and format for this agency. Using a standard first notice that isn’t complicated, and including where applicable State laws that require additional language, doesn’t seem that difficult. However, lets allow creativity and lets allow the consequences to focus again on language. Sorry, I have no sympathy to offer this agency and spending any time to interpret “unsophisticated debtor” isn’t new so just use standard language and not include-”read the back of the notice as well”.

  • avatar Expert Expert says:

    The “least sophisticated debtor” doctrine will never been AMENDED or DELETED by Congress. The issue is “why can’t collection agencies get the demand letter language issue correct?” Perhaps a new “least sophisticated collection agency doctrine” should be created by Congress for those who can never get the letter language correct?

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