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Financial Services Law Insights and Observations

3rd Circuit: Debt collection letter with invitation to call does not violate FDCPA

Courts Appellate Third Circuit Debt Collection FDCPA Class Action

Courts

On March 16, the U.S. Court of Appeals for the Third Circuit affirmed a district court order granting summary judgment in favor of a defendant debt collection agency after concluding that a letter inviting recipients to call to “eliminate further collection action” did not deceive debtors. The plaintiff brought the putative class action lawsuit under the FDCPA claiming the defendant’s letter deceived debtors by making them think a phone call is a “legally effective” way of ending collection activity. The plaintiff also argued that the letter raised uncertainty about a debtor’s right to dispute a debt in writing. According to the plaintiff, because the letter placed the invitation to call above an acknowledgment that recipients can also respond in writing, debtors were left uncertain about which format to use. The district court disagreed and granted summary judgment to the defendant.

On appeal, the 3rd Circuit reasoned that the letter was not deceptive. According to the appellate court, the defendant never said “explicitly or implicitly[] that the phone call would, by law” end collection efforts. Further the letter did not create any confusion about whether a debtor should call or write to exercise their rights. Finally, the court rejected the argument that the order of paragraphs in the letter created confusion.

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