Appeals Court Sides with Collectors in FDCPA Cases Challenging Letter Language

A three-judge panel in the Seventh Circuit Court of Appeals last week upheld lower court rulings in a consolidated case that found minor deviations from the validation notice language in debt collection letters do not constitute violations of the Fair Debt Collection Practices Act (FDCPA).

The consolidated case, Gruber v. Creditors’ Protection Service, was made up of four separate actions against four separate collection agencies that used the same language in their dunning letters. Between 2012 and 2013, plaintiffs received letters from 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.

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. According to the plaintiffs, 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.”

The consumers claimed that the omission creates the risk that an unsophisticated consumer who may wish to exercise his rights would fail to properly do so. Specifically, the unsophisticated consumer might be misled to request verification instead of to dispute the debt.

In all four cases, filed in the U.S. District Court for the Eastern District of Wisconsin, the judges granted the collection agency defendants’ motion to dismiss. On appeal, the cases were consolidated into Gruber.

The appellate court rejected the impact on an unsophisticated consumer, writing, “The problem for the plaintiffs is that 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. In other words, a request to verify the existence of a debt constitutes a ‘dispute’ under the [FDCPA].”

Accordingly, the panel concluded that as a matter of law, the defendants’ notices comply with § 1692g(a)(4) of the FDCPA and affirmed the prior district court rulings dismissing the cases.

In a separate but related matter, one of the letters included the statement “[w]e believe you want to pay your just debt” immediately before the validation notice. The plaintiff in that case claimed that the inclusion of “just debt” overshadows the notice and influences unsophisticated consumers into thinking a judgment was already entered.

The Court rejected this argument as well, noting that the statement did not violate the FDCPA as it was “mere puffery.”