Collection Letterhead Can be an FDCPA Violation, Judge Rules

A federal magistrate judge ruled this week that the letterhead on collection letters cannot be from a law firm unless an attorney has reviewed the file and the firm is truly poised to file a lawsuit.

U.S. Magistrate Judge Andrew J. Smyser, of the Middle District of Pennsylvania, ruled that two collection letters from a New York law firm violated the Fair Debt Collection Practices Act (FDCPA) because the use of law firm letterhead gave the false impression that an attorney had engaged in meaningful review of the account and was planning to file suit.

Smyser entered his opinion in the case, Lesher v. Law Offices of Mitchell N. Kay, on June 14.

The case stemmed from letters that were sent to the plaintiff to attempt to collect a Washington Mutual debt.  Law Offices of Mitchell N. Kay sent the letters with their letterhead, and the body of the letter was offering a settlement to Darwin Lesher with an invitation to visit the defendant’s Web site to make a payment.

But the letter contained a sentence reading, “[a]t this point in time, no attorney with this firm has personally reviewed the particular circumstances of your account.”

Despite that disclosure, Smyser said that including a law firm’s letterhead led the defendant to believe the account was in the legal collection process.

"A law firm’s letter does bear an implied threat of litigation, and does connote that it is a communication from an attorney,” he wrote. "In our view, that language does not mitigate the impression of potential legal action.”

Smyser further wrote, “The least sophisticated consumer would be likely to believe upon receiving a communication from an attorney for the lender that the debt collection process has entered into a phase where the lender through its attorney will begin to use procedures established by law and known to attorneys to collect the debt."

Smyser granted summary judgment in favor of plaintiff Lesher on two of his FDCPA claims. Under the regulation, the remedy for such claims is a $1,000 award to the plaintiff and an award of attorney fees.

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