In a split decision, the First Circuit Court of Appeals last week upheld a lower court ruling that a collection letter send by a law firm violated the FDCPA because it gave the impression that the consumer could not dispute the debt and that payment was the only option to avoid litigation.
The case, Pollard v. Law Office of Mandy L. Spaulding, began after the consumer received an initial communication from Spaulding demanding payment for a $611 debt. Spaulding had been contracted after at least one other collection agency had attempted to recover the debt.
The letter from Spaulding was written on firm letterhead and was signed by the attorney. Despite containing the required disclosures, the plaintiff felt that the strongly-worded language used in the letter, and even the disclosure language itself, overshadowed her right to dispute.
At particular issue was the use of the phrases “not inclined to use further resources attempting to collect this debt before filing suit” and that the attorney was “obligated to my client to pursue the next logical course of action without delay” in the body of the letter. In addition, the letter included what the First Circuit majority called “hopelessly scrambled syntax” in its disclosure that the consumer has the right to dispute:
“We further inform you that despite the fact that you have a thirty (30) day period to dispute the debt may not preclude the filing of legal action against you prior to the expiration of the period.”
The majority affirmed the lower court decision using a standard “viewed from the perspective of the hypothetical unsophisticated consumer.” The judges said that “a collection letter is confusing if, after reading it, the unsophisticated consumer would be left unsure of her right to dispute the debt and request information concerning the original creditor.”
In a dissenting opinion, Judge Bobby Ray Baldock – of the 10th Circuit, but sitting by designation – noted that Spaulding may have implicitly demanded immediate payment “by expressing an intent to litigate immediately,” but that was her right, as conceded by the majority.
“So, if debt collectors are free to litigate immediately, and free to tell consumers they will litigate immediately sans payment, how is this letter improper?” wrote Baldock. He noted that the letter as a whole is relatively straightforward and did not overshadow the disclosure of dispute rights in dissenting with the majority opinion.