There seems to be a never-ending supply of letter language Fair Debt Collection Practices Act (FDCPA) cases. Today we’ll drill into an Eastern District of Wisconsin decision that discusses the language used when presenting a payment option to a consumer. In Al v. Van Ru Credit Corp., No. 17-CV-1738 (E.D. Wisc. Jan. 14, 2019), the court took issue with a letter stating that the consumer would need to act “promptly” to take advantage of a settlement offer without giving an actual due date.
Factual and Procedural Background
The facts in this case are relatively straight-forward. Defendant collection agency sent a letter to plaintiff that stated, “The balance you owe as of the date of this letter is $462.31. Presently, we are willing to accept $227.39 to settle your account, provided that you act promptly.” Plaintiff sued defendant alleging that the letter violates the FDCPA and the Wisconsin Consumer Protection Act.
Defendant’s corporate representative testified that the letter is a form template that is sent if defendant deems it appropriate. Defendant would honor the settlement payment at any time until either the account is closed or the creditor changed defendant’s settlement authority. The settlement authority throughout the placement of this account gradually decreased. The letter in question was sent on March 10, 2017 and the creditor recalled the account on March 30, 2017.
Defendant filed a motion for summary judgment on all claims while plaintiff filed a motion for summary judgment seeking to remove the bona fide error defense.
The court denied defendant’s motion in part and granted it in part; it also granted plaintiff's motion.
The court found that the question of whether the letter was deceptive or misleading is best left for a jury. Of the three types of deceptive or misleading categories established by the Seventh Circuit in Janetos v. Fulton Friedman & Gullace, LLP, this letter might fall into the second: it is not misleading on its face, but has the potential to be misleading to the least sophisticated consumer. This, according to the court, falls to a jury to evaluate and thus summary judgment is not appropriate.
The court also took issue with the fact that the letter was unclear as to the terms of payment. Specifically:
The Letter is potentially deceiving as to the most basic element of the parties’ relationship -- the terms of payment for the debt, namely the time in which to pay. Indeed, the very purpose of requesting “prompt” payment was to influence Plaintiff’s decision to pay.
The court did grant summary judgment in favor of defendant regarding the 692f claims. Section 1692f of the FDCPA is a catch-all provision and, according to the court, shouldn’t proceed on the same facts that underlie a more specific violation under a different section.
Finally, the court decided to strike down defendant’s bona fide error defense. The court found that defendant presented no evidence showing that they inadvertently included the language or that there was some printing error. Instead, the court found that defendant was trying to argue a mistake of law, which is not protected under the bona fide error defense.
There you have it, folks. “Promptly” doesn’t cut it, but a due date might have done so according to the tea leaves set out by this decision. Will this open up another litigation can of worms? Probably; most letter cases that attempt to clarify letter requirements do. Alas, this is the burden debt collectors bear with a vague and outdated statute like the FDCPA, which is why many industry members are anxiously awaiting the Consumer Financial Protection Bureau’s new third party debt collection rules due out this spring.