Links in emails and text messages have been a hot topic ever since the Consumer Financial Protection Bureau (CFPB) issued its proposed debt collection rules, which are yet to be finalized. In the meantime, a court analyzed links in an email under the false/deceptive/misleading context of the FDCPA and found that the linked information is part of the collection notice, at least in this particular situation.


The Facts

In Zuniga v. TrueAccord, No. 18-cv-683 (D. N.M. June 1, 2020), defendant sent a collection notice via email. The notice contained a link to a page that contained three different payment plan options to pay off the full balance of $1,585: three installments of $529, six installments of $265, or nine installments of $177.

The problem occured when the plaintiff whipped out her calculator and realized that each of the payment plan options would add up to slightly more than the balance of the account if you mutliplied the installment payment amount by the number of installments. The differences ranged between $2 and $8 for the three different plans.

That first linked page, however, did not allow plaintiff to enter into one of the installment plans without certain further steps. Specifically, plaintiff had to click on another link related to the payment plan she desired, which would take her to another page that lists further detail about each payment plan. In the second linked page, each payment plan had equal payment installments, and a final payment that was slightly lower so that plaintiff would never pay more than the actual balance.

Plaintiff sued, however, arguing that the email contained false, deceptive and misleading information about the payment plans. Plaintiff mentioned she never intended to accept any of the payment plans because she couldn't afford them. Regardless, she argued that the communciation would mislead consumers into accepting the shortest payment plan because the total difference between the actual balance and the plan calculated balance was lowest for that one—$2—compared to the longest payment plan—$8.

The Court's Decision

The court found that plaintiff had standing to bring the case, but ultimately granted summary judgment in favor of defendant.

Regarding standing, defendant argued that plaintiff did not—and could not—suffer any actual harm since its systems are designed to prevent overpayment, and plaintiff never intended to take advantage of any of the payment plans. The court, however, found that the specific sections of the FDCPA mentioned in the complaint confer a substantive right to plaintiff, and thus she had standing to bring the claims.

In reviewing the communciation to determine whether it was false, deceptive, or misleading, the court viewed the communication "as a whole." Notably, the court considered the linked pages as part of the "whole" communication:

Furthermore, a least sophisticated consumer "is bound to read collection notices in their entirety" and, therefore, would click on the "Choose Option" hyperlinks to fully explore the payment options.

Ultimately, the court found that the email, read as a "whole" was not false, deceptive, or misleading because "the linked pages provide sufficiently clear information that a least sophisticated consumer woul dbe certain of his or her rights." The court specifically found that just because plaintiff did the calcuations, a least sophistcated consumer would not:

The Court, however, would not expect a least sophisticated consumer to independently calculate those payments and discover, as Plaintiff did, that the payments exceed the balance due.

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The court went further by finding that the bona fide error defense applies. The court states:

Specifically, the first linked page does not permit consumers to sign up for any of the installment options presented on that page but, instead, directs interested consumers to click on the "Choose Option" hyperlinks to access pages with complete payment information and sections for entering payment information. Hence, no reasonable jury, viewing the evidence in the light most favorable to Plaintiff, could find that Defendant subjectively intended for consumers to sign up for any of the installment options, as presented, in the first linked page.

. . . 

Even viewing the above evidence in the light most favorable to Plaintiff, no reasonable jury could find that Defendant acted unreasonably or in bad faith by presenting the highest payment in the first linked page when Defendant purposefully included the 'Choose Option' hyperlinks in the first linked page and did not provide a payment section in the first linked page.

insideARM Perspective

iA reached out to Kelly Knepper-Stephens, VP of Legal and Compliance at TrueAccord, for her thoughts. Kelly states:

The decision is very important as it is one of the first bona fide error cases evaluating the effectiveness of computer programming and product design. The Court concluded that when a product is programmed and designed to avoid a violation of the statute—here programmed only to permit payment of the exact amount owed—that the bona fide error defense applies and the debt collector is not liable. This is a big win for debt collectors developing and programming online tools for consumers to use.


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