FDCPA Updates for

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E-PRG provides select, updated information
from the Federal Trade Commission on issues pertaining to the
Fair Debt Collection Practices Act. Our updates focus on opinions
that could impact the way creditors and non-attorney third
parties communicate with consumers to collect debts.  However, in this newsletter:  a Court... 

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Using 'Could' in Collection Letter Could Violate FDCPA: Court

Overturning an earlier decision, the 3rd U.S. Circuit Court of Appeals has ruled that lawyers who use the word ‘could’ in a debt collection letter may be deliberately misleading the debtor and in violation of the Fair Debt Collection Practices Act.

The 3rd Circuit Court overturned an earlier decision that rejected a lawsuit filed by plaintiff Elizabeth Brown, who argued that a letter she received from Card Service Center deceptively led her to believe that if she did not pay her debt within five days the matter ‘could’ result in referral of the account to an attorney and ‘could’ result in “a legal suit being filed.”

Brown’s lawyers argued that CSC’s use of the word ‘could’ was deceptive since the firm did not actually intend to refer Brown’s account to an attorney or file a lawsuit.

In a proposed class-action lawsuit, the lawyers said that CSC’s letter was intended to “coerce and intimidate the consumer … by false threat” because it suggested a deadline that was “false and overstated,” according to a report in the Legal Intelligencer.

The lawsuit was first dismissed by U.S. District Judge William Yohn, who said the letter “states only that legal action and referral to an attorney ‘could’ result from plaintiff’s noncooperation,” and concluded that “even the least sophisticated consumer would realize this statement to mean that because he has allowed his debt to remain unpaid, a suit may be brought to collect the money owed.”

But the 3rd Circuit Court of Appeals has now reversed that decision and ruled that Brown has a point because a jury might find the CSC letter deceptive, according to the Legal Intelligencer.

A debt-collection letter is deceptive, Circuit Court Judge Julio M. Fuentes said, if “it can be reasonably read to have two or more different meanings, one of which is inaccurate.”

If Brown can claim that CSC rarely litigated or referred debt to an attorney, a jury might find the letter deceptive, the judge said.
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