The Eleventh Circuit recently addressed three issues of first impression in the Circuit regarding the application of the Fair Debt Collection Practices Act (FDCPA) to letters to consumers’ lawyers. Not surprisingly, the court ruled in favor of the consumer although the arguments made by the collector did seem somewhat weak. In Bishop v. Ross Earle & Bonan, P.A., — F.3d —-, 2016 WL 1169064 (11th Cir. 2016) (click here for .pdf) the Debt Collectors (on behalf of an HOA) sent a collection letter to the Plaintiff’s attorney rather than the Plaintiff debtor. The letter informed the Plaintiff that she had 30 days to dispute the debt, but it did not specifically inform her that the dispute must be in writing as required by §1692g of the FDCPA.
The three questions of first impression in the Circuit that were addressed are:
The first is whether a debt-collection letter sent to the consumer’s attorney—rather than directly to the consumer —qualifies as a “communication with a consumer” so as to trigger § 1692g of the FDCPA.
The second is whether omitting the “in writing” requirement set forth in § 1692g amounts to waiver of that requirement by the debt collector, and, if so, whether such a waiver advances the purpose of the FDCPA.
The third is whether omission of the “in writing” requirement states a claim for “false, deceptive, or misleading” behavior in violation of § 1692e.
Section 1692g of the FDCPA requires a debt collector to provide a consumer with a notice of debt that contains:
… a statement that if the consumer notifies the debt collector in writing within [a] thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.
The Plaintiff filed a lawsuit alleging that the letter violated §1692g by failing to notify her of the “in writing” requirement, and that the failure to include the requirement constituted a “false representation or deceptive means to collect or attempt to collect any debt” pursuant to §1692e. The Debt Collector argued that the letter to the Plaintiff’s lawyer was not a “communication with the consumer” that triggered the notice requirements at issue because it was not sent to the consumer. The court disagreed and held that the letter to the Plaintiff’s lawyer qualified as a “communication with the consumer” that triggered the FDCPA requirements.
Section 1692g regulates the contents of a “notice of debt,” as well as certain procedures for handling disputed debts. 15 U.S.C. § 1692g(a)-(b). Its protections are triggered when a debt collector makes an “initial communication with a consumer.” Id. § 1692g(a). To confirm that § 1692g applies to attorney communications, we need look no further than this triggering phrase. The FDCPA defines the term “consumer” as “any natural person obligated or allegedly obligated to pay any debt.” Id. §1692a(3). It defines “communication” as “the conveying of information regarding a debt directly or indirectly to any person through any medium.” Id. § 1692a(2) (emphasis added). It follows that § 1692g, which applies to the “initial communication with a consumer,” can be triggered either by a direct communication or by an indirect communication… This conclusion flows from a commonsense understanding of the attorney-client relationship… The attorney is a conduit to the consumer; thus, a debt-collection letter sent to the consumer’s attorney is an indirect communication with the consumer…
More generally, two important goals of the FDCPA are “to eliminate abusive debt collection practices” and “to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). To advance these goals, the FDCPA encourages the involvement of attorneys. See id. § 1692c(a) (“[A] debt collector may not communicate with a consumer in connection with the collection of any debt … if the debt collector knows the consumer is represented by an attorney ….”); id. § 1692b (explaining that when a consumer is represented by an attorney, a debt collector seeking location information “shall … not communicate with any person other
than that attorney”). As we observed in Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1296–97 (11th Cir.2015) when analyzing §§ 1692d–1692f, it would be “odd … indeed” to encourage the involvement of attorneys while simultaneously removing the other protections afforded by the FDCPA.
The court then addressed the Debt Collector’s argument that the failure to include the “in writing” notice merely served as a waiver of that requirement, and actually advanced the purpose of the FDCPA as it favored the consumer and imposed a less stringent requirement. Again, the court rejected the Debt Collector’s argument.
We reject the notion that § 1692g gives debt collectors discretion to omit the “in writing” requirement or cure improper notice by claiming waiver. The statute is clear. The debt collector “shall” notify the consumer of her right to dispute the debt in writing. 15 U.S.C. § 1692g(a). Likewise, the consumer has a right to verification only if she disputes the debt in writing. Id. § 1692g(b)… Nothing in the statute suggests that debt collectors have discretion to relax these requirements… This Court will not judicially fashion a “waiver remedy” for violations of § 1692g when the FDCPA identifies civil liability as the remedy for
The third and final issue was whether the omission of the “in writing” requirement could be “false, deceptive, or misleading” within
the meaning of § 1692e. This section prohibits “false, deceptive, or misleading” behavior, including using “false representation or deceptive means to collect or attempt to collect any debt.” §1692e(10). The court evaluated the question under the “least sophisticated consumer” standard and again rejected the Debt Collector’s argument that the court should use a “competent lawyer” standard since the letter was sent to the Plaintiff’s lawyer.
The communication alleged in this case omitted a material term required by § 1692g(a). Specifically, the letter did not inform [Plaintiff] that she must dispute her debt “in writing” to trigger her verification rights under § 1692g(b). By omitting this requirement, the Collectors instructed [Plaintiff] that she could invoke § 1692g(b) by disputing her debt orally—a misstatement of the law surrounding debt-verification requests. This misrepresentation was not apparent on the face of the letter; it would thus state a claim even in jurisdictions that apply the “competent lawyer” standard… The FDCPA exists to “protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). Consumer-protection laws are “not made for the protection of experts, but for the
public—that vast multitude which includes the ignorant, the unthinking, and the credulous.” .. The “least sophisticated consumer” standard advances this purpose, and we will not abandon it lightly…
Finally, we note that consumer protection is not the only goal of the FDCPA. The statute was also designed to “eliminate abusive debt collection practices by debt collectors” and “insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.” 15 U.S.C. § 1692(e). Notwithstanding their effect—or lack thereof—on particular
consumers, false statements are an abusive debt collection practice. The “fact that a false statement may be obviously
false to those who are trained and experienced does not change its character, nor take away its power to deceive others
less experienced.”… We conclude, therefore, that this case is not an appropriate vehicle to adopt the “competent lawyer” standard in any form.
The court then held that the Plaintiff stated a claim for “false, deceptive or misleading” behavior.
We hold that the communication alleged in this case states a claim for “false, deceptive, or misleading” behavior under § 1692e. Neither the “competent lawyer” nor the “least sophisticated consumer” could be said to have notice of the “in writing” requirement after receiving a letter like the one alleged… Nor are we inclined to excuse false statements, as a matter of law, based merely on the suggestion that a lawyer might be better equipped to recognize their falsity… We emphasize the fact-specific nature of this holding. The “initial communication” alleged in this case states a claim under § 1692e because it misstates the law, omits a material term required by § 1692g(a), and misrepresents consumer rights under the FDCPA. See 15 U.S.C. § 1692g.
In the end, this probably was not the best case for the Debt Collector to press its arguments, and the outcome was not a surprise.
Scott Riddle’s practice focuses on bankruptcy and litigation. Scott has represented Chapter 7 and 11 debtors, creditors, creditor committees, trustees, court-appointed receivers and other interested parties in bankruptcy cases and bankruptcy litigation. For more information, click here.