Why shouldn’t debt collectors be able to use aggressive tactics to encourage payment of legitimate bills?
Circuit Judge Ripple Sandra Williams . . . sought relief under the Fair Debt Collection Practices Act (“FDCPA”). The district court granted the defendant, OSI Educational Services, Inc., (“OSI”), summary judgment. Ms. Williams then filed a timely appeal to this court. I. BACKGROUND A Ms. Williams is a consumer whose debt was incurred for personal, family or household purposes. OSI is a debt collection agency; it was hired by Great Lakes Higher Education Guaranty Corp. (“Great Lakes”) to collect its debts. OSI sent Ms. Williams a letter and a debt validation notice, dated March 28, 2005. The letter sought to collect a sum of $807.89 labeled as “Total Due,” which was the outstanding balance owed to Great Lakes. The letter breaks down the amount owed as follows: II. DISCUSSION Ms. Williams submits that there is an issue of material fact as to whether OSI’s letter clearly states the amount of the debt, as required by the FDCPA. In examining that contention, we begin with the wording of the statute. The FDCPA requires that debt collectors state “the amount of the debt” that they are seeking to collect from the consumer. The debt collector’s letter must state the amount of the debt “clearly enough that the recipient is likely to understand it.” Chuway v. Nat’/Action Fin.Servs. Inc. To ensure that this statutory command is implemented properly, we must evaluate the letter to determine whether it causes any “confusion” or “misunderstand[ing]” as to the amount due. In making this determination, we evaluate the letter from the perspective of an “unsophisticated consumer or debtor.” The unsophisticated consumer is “uninformed, naive, [and] trusting,” but possesses “rudimentary knowledge about the financial world, is wise enough to read collection notices with added care, possesses ‘reasonable intelligence,’ and is capable of making basic logical deductions and inferences.” Pettit v. Retrieval Masters Creditors Bureau, Inc. Notably, we have rejected explicitly the notion that we should employ the least sophisticated debtor standard, the “very last rung on the sophistication ladder” Pettit. * * * * * would be different than the stated “balance.” The plaintiff could have thought that “the reference to the ‘current balance’ meant that the defendant was trying to collect an additional debt [without] telling her how large an additional debt and thus violating the statute.” In contrast, the language in OSI’s letter links the difference between the “total due” and the “exact payout balance” to the “interest which is accruing daily per your original agreement with your creditor.” OSI’s letter thus provides the information that created the confusion in the Chuway letter. Ms. Williams’ second and third arguments are best treated together. She submits that the letter’s language leaves open the possibility that the actual amount due is less than the amount stated on the letter. She further suggests that the sentence’s use of the present tense makes it possible to conclude that the stated amount due was not accurate on the date that the letter was written. In our view, both these contentions are based on a strained reading of the sentence. It would be “unrealistic, peculiar, [and] bizarre” to read OSI’s letter in this way. Durkin. The common sense reading of the letter is that the balance is accurate as of the date the letter is written, but that the amount due will increase because of interest that is accruing daily. This construction is supported by the letter’s itemization of “PRINCIPAL,” “INTEREST,” “FEES” and “TOTAL DUE” in a box with, and immediately below, the “DATE.” Under a natural reading, the language conveys, even to an unsophisticated consumer, that interest will accrue after the letter is sent and therefore that the consumer should call to find out the “exact payout balance.” As we said in Chuway, “It is impossible to draft a letter that is certain to be understood by every person who receives it; only if it would confuse a significant fraction of the persons to whom it is directed will the defendant be liable.” We believe that the language in this letter is closer to the language in Taylor than to the language in Chuway. In Taylor, the letter similarly set forth the total due and broke down that total into principal and interest. If further stated: “[I]f applicable, your account may have or will accrue interest at a rate specified in your contractual agreement with the original creditor.” Three plaintiffs in Taylor had submitted affidavits stating that this sentence confused them about the amount of debt that the debt collector was trying to collect. We held that the language was “entirely clear on its face.” . . . As we noted earlier, in opposing summary judgment, Ms. Williams relied solely on OSI’s letter. She submitted no other evidence to support her view that OSI’s letter is confusing. Without more, Ms. Williams’ unsupported assertion that OSI’s letter is confusing is insufficient to create a genuine issue of fact as to confusion. CONCLUSION The letter set forth the amount of the debt with sufficient clarity and accuracy to comply with the requirements of the statute. Affirmed. Questions 1. a. A debt collection letter must be evaluated to determine whether it causes confusion or misunderstanding for the consumer. What level of consumer sophistication was employed by the court to determine whether the debt collection letter to Williams caused confusion or misunderstanding? b. Is confusion on the part of an individual consumer conclusive evidence of a violation of the Fair Debt Collection Practices Act? Explain. c. Describe the two ways by which a plaintiff/consumer can establish that a debt collection letter caused an impermissible level of confusion or misunderstanding. 2. Miller owed $2,501.61 to the Star Bank of Cincinnati. Payco attempted to collect the debt by sending a one-page collection form to Miller. The front side of the form included, among other words, in very large capital letters a demand for IMMEDIATE FULL PAYMENT, the words PHONE US TODAY, and the word NOW in white letters nearly two inches tall against a red background. At the bottom of the page in the smallest print on the form was the message: NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION. The reverse side contained the validation notice required under the FDCPA. Does the form conform to FDCPA requirements? Explain. See Miller v. Payco-General American Credits, Inc., 943 F.2d 482 (4th Cir. 1991). 3. Why shouldn’t debt collectors be able to use aggressive tactics to encourage payment of legitimate bills?
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