November 25, 2014
by Lindsay Allen
Bendett & McHugh, P.C. – USFN Member (Connecticut, Maine, Vermont)
In a September 2014 opinion, Pollard v. Law Office of Mandy Spaulding1, the U.S. First Circuit Court of Appeals found that a Massachusetts attorney violated the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p. The violation stemmed from a debt collection letter that did not convey the borrower’s debt validation and dispute rights under the FDCPA in a non-confusing manner. The court further determined that the burden is on the debt collector to advise consumers of their FDCPA rights in a way that a typical “unsophisticated borrower” would understand. Lastly, the court held that, while the statute is silent on the distinction, attorney debt collection letters in the First Circuit are subject to a greater degree of scrutiny than letters sent by other debt collectors. (The First Circuit is comprised of Maine, Massachusetts, New Hampshire, and Rhode Island.)
In finding that the debt collection letter sent by the defendant law firm overshadowed and contradicted the borrower’s debt validation and dispute rights under the FDCPA, the court focused on the fact that the letter was both confusing and unclear about the debtor’s right to dispute the debt. In the court’s words: “at [the] bottom, the letter seems to threaten immediate litigation. We think that, implicit in this threat, is the idea that litigation can be avoided only if payment is made forthwith.” Additionally, because of a typographical error contained within the debt validation rights notice, the court reasoned that a consumer could conclude that her right to dispute the debt would be trumped by the attorney debt collector’s intent to litigate. This, the court held, runs afoul of FDCPA § 1692g, which requires that a debt collector’s communications are not “inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.”
While reaching its decision, the court adopted the hypothetical “unsophisticated consumer” standard when reviewing the adequacy of debt collection letters under the FDCPA. Applying this standard to the subject letter, the court found that a typo in the second to last paragraph was enough to make an important provision unintelligible and, as a result, the debtor had not been adequately apprised of his FDCPA rights. The court further stated that this determination is not based upon the debt collector’s intent but, instead, “it is the unsophisticated consumer’s perception of the letter . . . that controls a determination of whether a collection letter overshadows or contradicts a validation notice.”
The court rounded out its decision by making a distinction between attorney debt collectors and non-attorney debt collectors, stating that debt collection letters sent by attorneys “warrant closer scrutiny because their abusive collection practices are more egregious than those of lay collectors.” The Pollard case certainly reinforces the importance of clearly communicating the notice requirements of FDCPA § 1692g (a), and taking care that those rights are not overshadowed. However, the decision offers little specific guidance to debt collectors going forward.
1 Pollard v. Law Office of Mandy L. Spaulding, No. 13-2478, 2014 U.S. App. LEXIS 17345 (1st Cir. Sept. 8, 2014).
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