A debt-collecting law firm that sent to a consumer’s attorney a demand letter omitting two words required by the Fair Debt Collection Practices Act could have indirectly communicated with the consumer, the U.S. Court of Appeals for the Eleventh Circuit has determined. The court also decided that the firm’s failure to include in its consumer warnings that the debt needed to be disputed in writing if the consumer wanted to invoke the FDCPA debt verification procedures could have been a misrepresentation (Bishop v. Ross Earle & Bonan, P.A., March 25, 2016, Black, S.).
The claimed debt comprised $2,000 in fines the consumer was said to owe her homeowners’ association, the court said. The law firm’s demand letter was sent to the consumer’s attorney, rather than to the consumer, because she had told the association to contact her attorney about the fines.
Required FDCPA disclosures. Debt collectors are required to provide specified information to consumers, either as part of their initial communication or within the following five days. Among these disclosures is that the debt collector will provide verification of the debt if the consumer demands verification in writing within 30 days. The law firm’s disclosures omitted “in writing.”
Claiming that the omission was a misrepresentation under the FDCPA, the consumer sued.
Letter to attorney. Contrary to the debt collector’s claim, the letter to the consumer’s attorney was a communication with the consumer, the court said, because a communication can be indirect. It was expected that the consumer’s attorney would explain the letter to her.
The FDCPA bans communicating with a consumer who has an attorney “unless the attorney consents to direct communication,” the court pointed out (15 U.S.C. §1692c(a)(2)). This use of “direct communication” implies that communicating through the attorney constitutes indirect communication.
If the letter to the consumer’s attorney were not a communication to a consumer, then the consumer would have forfeited some of her protection under the FDCPA by seeking legal help. That would an illogical result, in the court’s belief. The ability of a consumer’s attorney to research, discern, and explain the “in writing” requirement did not allow the debt collector to omit the requirement from its disclosures.
Waiver. The appellate court was unimpressed with the debt collector’s claim that it was merely waiving its right to require a written demand and allowing the consumer to ask for verification orally. Nothing in the FDCPA said that a debt collector can reduce the disclosures it must provide by such a waiver.
Misrepresentation. Omitting the “in writing” term in the letter to the attorney also could be a misrepresentation, the court decided. It was true that the misrepresentation would have been delivered to the consumer through her attorney, the court conceded, but the yardstick remained the effect it would have on the “least sophisticated consumer.” There was no “competent lawyer” standard under the FDCPA in the case of a misrepresentation.
Part of the reason, the court said, is that the FDCPA is not intended only to protect consumers. It also is intended to ensure that ethical debt collectors are not at a competitive disadvantage compared to others who use abusive tactics. From that point of view, it was not appropriate to allow misrepresentations, regardless of who received those misrepresentations.
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The claimed debt comprised $2,000 in fines the consumer was said to owe her homeowners’ association, the court said. The law firm’s demand letter was sent to the consumer’s attorney, rather than to the consumer, because she had told the association to contact her attorney about the fines.
Required FDCPA disclosures. Debt collectors are required to provide specified information to consumers, either as part of their initial communication or within the following five days. Among these disclosures is that the debt collector will provide verification of the debt if the consumer demands verification in writing within 30 days. The law firm’s disclosures omitted “in writing.”
Claiming that the omission was a misrepresentation under the FDCPA, the consumer sued.
Letter to attorney. Contrary to the debt collector’s claim, the letter to the consumer’s attorney was a communication with the consumer, the court said, because a communication can be indirect. It was expected that the consumer’s attorney would explain the letter to her.
The FDCPA bans communicating with a consumer who has an attorney “unless the attorney consents to direct communication,” the court pointed out (15 U.S.C. §1692c(a)(2)). This use of “direct communication” implies that communicating through the attorney constitutes indirect communication.
If the letter to the consumer’s attorney were not a communication to a consumer, then the consumer would have forfeited some of her protection under the FDCPA by seeking legal help. That would an illogical result, in the court’s belief. The ability of a consumer’s attorney to research, discern, and explain the “in writing” requirement did not allow the debt collector to omit the requirement from its disclosures.
Waiver. The appellate court was unimpressed with the debt collector’s claim that it was merely waiving its right to require a written demand and allowing the consumer to ask for verification orally. Nothing in the FDCPA said that a debt collector can reduce the disclosures it must provide by such a waiver.
Misrepresentation. Omitting the “in writing” term in the letter to the attorney also could be a misrepresentation, the court decided. It was true that the misrepresentation would have been delivered to the consumer through her attorney, the court conceded, but the yardstick remained the effect it would have on the “least sophisticated consumer.” There was no “competent lawyer” standard under the FDCPA in the case of a misrepresentation.
Part of the reason, the court said, is that the FDCPA is not intended only to protect consumers. It also is intended to ensure that ethical debt collectors are not at a competitive disadvantage compared to others who use abusive tactics. From that point of view, it was not appropriate to allow misrepresentations, regardless of who received those misrepresentations.
For more information about consumer debt collection protections, subscribe to the Banking and Finance Law Daily.
