District Court says undated collection letter is misleading
On February 9, the U.S. District Court for the Southern District of Florida partially granted a defendant debt collector’s motion to dismiss an action alleging an undated collection letter violated various provisions of the FDCPA. Plaintiff received a collection letter from the defendant providing information on the amount of outstanding debt and instructions on how to dispute the debt, as well as a timeframe for doing so. However, the letter sent to the plaintiff was undated, and the plaintiff asserted that it was impossible for him to determine what “today” meant when the letter said “‘[b]etween December 31, 2021 and today[,]’” or what “now” referred to in the context of “[t]otal amount of the debt now.” He argued that by withholding this necessary information, the letter appeared to be illegitimate and misleading, and ultimately caused him to spend time and money to mitigate the risk of future financial harm. The defendant moved to dismiss for failure to state a claim, maintaining that the letter “fully and accurately stated the amount of the debt and otherwise complied with all requirements of the [statute].” The defendant further argued that the letter “conforms exactly to” the debt collection model form letter provided by the CFPB, and insisted that, because it complied with 12 C.F.R. § 1006.34(d)(2), it fell within the safe harbor provided by Bureau regulations to debt collectors that use the model form letter. The defendant contended that, even if it did not qualify for the safe harbor provision, it is not a violation of the FDCPA for a debt collection letter to be undated. The plaintiff asked the court to ignore the Bureau’s safe harbor provision and find that the undated letter is sufficient to state a plausible FDCPA claims.
In dismissing one of plaintiff’s claims, the court agreed with the defendant that the plaintiff failed to provide any factual or plausible allegations demonstrating “harass[ment], oppress[ion], or abuse” by the defendant (a requirement for alleging a violation of 15 U.S.C. section 1692d). “An undated letter, with little else, is not ‘the type of coercion and delving into the personal lives of debtors that [section] 1692d in particular was designed to address,” the court wrote.
However, the court determined that the plaintiff’s other three claims survive the motion to dismiss. First, the court held that the defendant’s reliance on the model form letter “overstates both the meaning and scope of the regulatory safe harbor provided by the CFPB.” Specifically, the plaintiff did not allege that the defendant violated any CFPB regulations—he alleged violations of the FDCPA, and the court explained that nowhere does the Bureau state that using the model form letter “suffices as compliance with the corresponding statutory requirements of [FDCPA] section 1692g.” Moreover, while use of the model form might provide a safe harbor from some of the statute’s requirements, “a safe harbor for the form of provided information is different from a safe harbor for the substance of that information,” the court said, adding that using the model form letter alone does not bar plaintiff’s claims. Additionally, the court determined that under the “least-sophisticated consumer” standard, the plaintiff alleged plausible claims for relief based on the omission of the date in the letter. Among other things, the undated letter could be interpreted as not stating the full amount of the debt, nor does the letter provide a means for plaintiff to assess how the debt might increase in the future if he did not make a prompt payment. With respect to whether the defendant used “unfair or unconscionable means to collect” the debt, the court determined that the undated letter’s misleading nature as to the full amount of the debt might “be ‘unfair or unconscionable’ to the least-sophisticated consumer.”