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Eleventh Circuit Narrowly Construes ‘Communications’ Under FDCPA

Incoming mail. blue mailbox with letters isolated on white with clipping pathThe U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a borrower’s allegations under the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act as to one letter, the purpose of which was to request additional information, but reversed as to two other letters, holding that they were sent in connection with the collection of a debt.

A copy of the opinion is available at: Link to Opinion.

The plaintiff’s mortgage loan went into default and the law firm representing the lender sent the borrower three letters. Two weeks later, the borrower sued the law firm under the FDCPA and the FCCPA.

The district court dismissed plaintiff’s allegations, because it found that the “animating purpose” of the letters was to respond to plaintiff’s requests, not to demand payment in an attempt to collect a debt, and thus, neither the FDCPA nor the FCCPA applied.

The borrower appealed the dismissal, arguing that the letters on their face said they were sent for the purpose of collecting a debt, and failed to contain certain required disclosures.

The Eleventh Circuit began its analysis by pointing out that the FDCPA prohibits debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” In its initial communication, a debt collector must disclose that “it is attempting to collect a debt and that any information obtained will be used for the purpose” and, in later communications, must disclose that it is a debt collector. Although the FDCPA does not define “initial communication,” it does define “communication” as “the conveying of information regarding a debt directly or indirectly to any person through any medium.”

Relying on its decision in Caceres v. McCalla Raymer, LLC, 755 F. 3d 1299, 1302 (11th Cir. 2013), the Eleventh Circuit noted that, when determining whether a communication “is in connection with the collection of any debt,” and thus subject to the FDCPA and FCCPA, courts look to the language of the letter at issue for statements that demand payment, warn that additional fees will accrue if payment is not made, or state that the sender is attempting to collect a debt.

However, the Court also noted that a communication can have more than one purpose, such as providing information to a debtor, while also attempting to collect a debt.  In addition, the Court noted that a demand for payment does not need to be express, but can be implied when the letter states the amount owed, describes payment options and where the debt can be paid, and expressly states that the purpose of the letter is to collect a debt.

The Eleventh Circuit concluded that the first letter was not sent in connection with the collection of debt, but instead merely responded to the debtor’s request for validation of the debt and requested completion of a missing form.  Because the first letter did not mention the amount owed, implicitly or explicitly demand payment, or discuss the repercussions of non-payment, the Court held it was not an attempt to collect a debt. Thus, the Court affirmed the district court’s dismissal with prejudice as to the first letter.

The Court, however, concluded that the other two letters were attempts to collect a debt, because each contained an implicit demand for payment, stated the amount of the debt, and described how and where payment could be made.

Also, one of the other two letters stated that fees and costs would continue to accrue until the default was cured, and the other stated that the debt would continue to increase if the borrower did not reinstate the loan. Finally, both letters expressly stated that they were sent in an attempt to collect a debt.

Because the two letters were communications sent in connection with the collection of a debt, the Eleventh Circuit held that as to these letters, the district court erroneously dismissed the borrower’s FDCPA and FCCPA allegations.

Accordingly, the district court’s order dismissing the borrower’s allegations was affirmed as to the first letter, but reversed as to the other two letters, and the case was remanded for further proceedings.

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The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

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