Appeals Court Rules on Debtors? Counsel Communications

A recent appeals court ruling clarified aspects of the FDCPA related to communications with consumers and consumers’ lawyers, according to a release last week from ARM industry trade group DBA International. 

The U.S. Court of Appeals for the Seventh Circuit handed down a ruling Oct. 23 regarding discount letters and communications with debtors’ counsel as it relates to the Fair Debt Collection Practices Act, the DBA reports.

The court ruled in five areas, finding that:

• Any written notice sent to the consumer’s lawyer must contain the information required by the FDCPA if the same notice were sent to the consumer;

• The “unsophisticated consumer” standard is not appropriate for communications with lawyers. A competent lawyer is the standard for actionable behavior under the FDCPA;

• A false statement made to the consumer or indirectly through a lawyer is actionable under the FDCPA. Whether a statement is misleading depends on the sophistication of the recipient;

• Debt collectors can use the phrase “We are not obligated to renew this offer” when extending an offer to the consumer during the settlement process;

• Whether a debt collector’s communication is deceptive is a question of fact, not law, to be established through such evidence as a consumer survey.