Debt Collector’s Letter Urging Debtor To Timely Validate The Debt Was Not The Same As Demanding Timely Payment And Did Overshadow The Fdcpa Notice Of Consumer Rights

In McMurray v. ProCollect, Inc. (11-10291, 5th Cir., July 16, 2012), the debtor sued a debt collector alleging that a letter sent by the debt collector was inconsistent and overshadowed the FDCPA statutory notice contained in the letter. The letter stated: It is important that you pay your debt as failure to timely validate the referenced amount due will cause us to report your account to the credit reporting agencies. The letter also included in bold fonts, of same size as the contested statement, the notice of consumer rights required by 15 U.S.C. §1692g(a). The debtor claimed that the collector’s urging to timely validate the debt was the equivalent to a demand for timely payment. This was inconsistent with the FDCPA notice and the threat of reporting the debtor to the credit reporting agencies overshadowed the FDCPA notice. The debtor and the collector filed cross motions for summary judgment and the District Court concluded that the collector’s letter did not violate the FDCPA. In affirming the District Court judgment, the Sixth Circuit evaluated the letter under the unsophisticated consumer standard. It rejected the debtor’s argument that the urging for timely validation of the debt was the same as urging timely payment. Rather, the statement was not a demand for payment at all, let alone a demand for payment within less than the 30-day statutory contest period. As to the supposed threat of negative reporting, the Court held that such statement fall in the category of statements that encourage debtors to pay their debt by informing them of the possible negative consequences of failing to pay, which do not overshadow the language in the FDCPA notice. The court also concluded that the physical attributes of the FDCPA notice, such as its bold fonts that were the same size as the contested statement, helped in avoiding overshadowing the notice. It found particularly significant that the notice was located immediately above the line for tearing off the payment form. This special proximity provided visual confirmation that payment was only an option.

Download Related Document