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FDCPA: Eighth Circuit Reviews “Ceasing Communication” in Context

Posted By USFN, Tuesday, September 11, 2018
Updated: Friday, September 7, 2018

September 11, 2018

by Paul Weingarden and Brian Liebo
Usset, Weingarden & Liebo, PLLP – USFN Member (Minnesota)

In the decision rendered in Scheffler v. Gurstel Chargo, P.A. (8th Cir. Aug. 27, 2018), the court notes that the plaintiff Scheffler “is a former debt collector who has litigated a number of FDCPA claims against other debt collectors. Gurstel is a law firm engaged in debt collection.”

The case involves a credit card debt for which Gurstel obtained judgment against Scheffler in 2009, and later communications between Scheffler and Gurstel. Specifically, Scheffler sent the defendant law firm a “cease further communications letter” under the FDCPA. Thereafter, the law firm served a garnishment summons upon Scheffler’s bank in an attempt to collect the judgment and sent Scheffler a copy of the summons with a statement advising him to contact a collection representative with any questions.

In response, Scheffler did call a Gurstel collection representative. When the conversation turned to the underlying debt, Scheffler asked “OK, so what am I gonna do about that?” When the representative suggested a settlement, Scheffler warned that he had sent the law firm a cease communications letter and that the firm violated the letter’s directive. Scheffler then sued the law firm, alleging various violations of the FDCPA, including provision 15 U.S.C § 1692c(c), entitled “Ceasing communication.” After the dismissal of his case at the U.S. District Court level, with prejudice, this appeal followed.

Appellate Review
The “Ceasing communication” provision of the FDCPA reads in part: “If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt . . .” However, the FDCPA expressly exempts certain communications, including those made “to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor.” Id. at § 1692c(c)(2).

In reviewing Scheffler’s claims, the appellate court first disposed of the garnishment summons issue by noting that prior precedent held that sending a garnishment notice following a cease of communications demand is not a violation. See Scheffler v. Messerli & Kramer P.A., 791 F.3d 847, 848 (8th Cir. 2015). Further, the court concurred that the law firm’s inclusion of an invitation for the consumer to call with questions was not in itself a violation, nor was the language deceptive to an unsophisticated consumer since it was clear, concise, accurate, and fell within the ceasing communication exception of the FDCPA.

Scheffler contended that there should be liability under the FDCPA’s “unsophisticated consumer standard” and that the law firm’s communication was deceptive. The court described the “unsophisticated consumer standard” of the FDCPA as “designed to protect consumers of below average sophistication or intelligence without having the standard tied to ‘the very last rung of the sophistication ladder.’” Id. The court further reasoned that “[t]his standard protects the uninformed or naive consumer, yet also contains an objective element of reasonableness to protect debt collectors from liability for peculiar interpretations of collection letters.”

Perhaps the best news for the default industry involves the court’s review of the FDCPA claims surrounding the phone call between Scheffler and the law firm. The Eighth Circuit agreed with the Ninth Circuit that the FDCPA does not prevent a debt collector from responding to a debtor’s post-cease letter inquiry regarding a debt. See Clark v. Capital Credit and Collection Services, Inc., 460 F.3d 1162 (9th Cir. 2006) at 1170. “Indeed, to hold that a debt collector may not respond to a debtor’s telephone call regarding his or her debt would, in many cases, ‘force honest debt collectors seeking a peaceful resolution of the debt to file suit in order to resolve the debt — something that is clearly at odds with the language and purpose of the FDCPA.’” Id. (quoting Lewis v. ACB Business Services, Inc., 135 F.3d 389, 399 (6th Cir. 1998)).

In Scheffler, the appellate court agreed with the district court’s finding that Scheffler’s call to the law firm to discuss his debt was “an unsubtle and ultimately unsuccessful attempt to provoke [the law firm] into committing an FDCPA violation.” The appellate court further noted that “[e]ven if [the law firm’s] communication can be construed as an effort to collect on the debt in violation of the cease letter, it occurred after Scheffler called and asked a question about the underlying debt. An unsophisticated consumer would know that by behaving like Scheffler, he was waiving his rights under § 1692c(c) so as to allow the debt collector to answer his question. We hold Scheffler voluntarily and knowingly waived his cease letter for purposes of allowing [the law firm] to answer his question, and therefore [the law firm] did not violate Scheffler’s rights under § 1692c(c) by briefly discussing a possible resolution of the debt during the phone call.” The Eighth Circuit then affirmed the district court’s summary judgment order granted Gurstel in its entirety.

Closing Words
As a practice pointer, this case suggests that within the Eighth Circuit, if a debtor actually initiates the call, the creditor should be free to answer questions about the debt even when there has been a cease and desist letter, so long as there is no pressure or threatening language during the call to collect the debt. These calls should be closely monitored for FDCPA compliance and recorded, but it is a significant step in the right direction to deny FDCPA claims when it is the debtor who actively seeks out communication with the creditor.

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