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6th Cir. Reverses Dismissal of FDCPA Claim of Improper Text Viewable Through Envelope Window

The U.S. Court of Appeals for the Sixth Circuit recently reversed the dismissal of a consumer’s Fair Debt Collection Practices Act (FDCPA) claim based on debt collection information that was visible through a transparent window on two debt collection letters.

In so ruling, the Sixth Circuit held that the letters attached to the complaint did not contradict the factual allegations essential to the consumer’s claim and the complaint contained enough factual content that allowed the court to draw the reasonable inference that the defendant was liable for the misconduct alleged.

A copy of the opinion in Cagayat v. United Collection Bureau, Inc. is available at:  Link to Opinion.

The consumer allegedly received two collection letters that had a glassine window through which the words “Collection Bureau” were “written on the inward side of the paper page inside the envelopes and allegedly visible through each envelope’s glassine window.” In addition, she alleged that “someone looking at the envelopes in normal lighting can clearly read … the message: ‘call our toll-free Consumer Service Hotline at 1-866 … Collection Bureau … Compliance Department … account number on all communications.’”

The consumer sued the collection agency alleging that the collection letters violated the FDCPA and the Ohio Consumer Sales Practices Act (CSPA). The collection agency moved to dismiss. The trial court granted the motion and dismissed both claims with prejudice.

The consumer appealed, arguing that:  (1) the trial court’s “finding that the exhibits contradicted the [complaint’s] factual assertions was an improper finding of fact reserved for the jury”; (2) “impermissible language clearly visible from the exterior of an envelope violates 15 U.S.C. § 1692f(8) regardless of its location on the mailing”; and (3) the trial court “improperly applied the ‘least sophisticated consumer’ standard in finding that the contested language cannot be clearly read without unusual strain or effort because the language is upside down and backwards when the envelopes are held right-side up.”

The Sixth Circuit concluded that the trial court erred in granting the debt collector’s motion to dismiss.

The Court reasoned first that the FDCPA must be construed broadly to effectuate its remedial purpose of addressing “what Congress perceived to be a widespread problem in debt collection practices[.]”

In order to accomplish this end, “the Act imposes various procedural and substantive obligations on debt collectors[,]” one of which is §1692f(8), which prohibits a debt collector from using “unfair or unconscionable means to collect or attempt to collect any debt[,] including “[us]ing any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails … except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.”

The Sixth Circuit then explained that its task was to “determine whether language appearing through a glassine window of an envelope falls within the boundaries of §1692f(8)’s protection.”

Relying on the Third Circuit’s opinion in Douglass v. Convergent, which “held that §1692f(8) indeed prohibits debt collectors from including markings that are visible through a glassine or otherwise transparent window of an envelope that reveal that the contents of a letter pertain to debt collection[,]” as well as the Federal Trade Commission’s staff commentary on that section and trial court opinions, the Court found that “the words ‘Collection Bureau’” signal that the Letters pertain to collection of a debt. That is expressly barred by §1692f(8).”

The Sixth Circuit reasoned that “this type of ‘disclosure implicates a core concern animating the FDCPA—the invasion of privacy’—and accordingly is not benign … [because it] contravenes §1692f(8)’s purpose of preventing embarrassment ….” Accordingly, it “adopt[ed] the position that §1692f(8) applies to curtail language or symbols showing a communication pertains to collection of a debt that is visible through a glassine window of an envelope.”

Turning to the appellant’s argument that the trial court erred by dismissing her complaint based on contradictions between the letters attached to the complaint and its allegations, the Court explained the rule that “if the ‘pleadings internally contradict verifiable facts central to [a plaintiff’s] claims, that makes [the plaintiff’s] allegations implausible.’”

After reviewing the facts alleged in the complaint and exhibits thereto, the Court disagreed with the trial court’s conclusion “that the exhibits sufficiently contradict the factual assertions central to [plaintiff’s] claim …” because the lower court applied the legal standard applicable to a motion to dismiss incorrectly.

“Rather than viewing the factual allegations in the complaint in the light most favorable to [plaintiff] and determining whether the evidence presented in the exhibits contradicts those facts, the district court summarily concluded that the contested language was not ‘clearly visible’ and could not be read ‘without unusual strain or effort[.]’”

The Sixth Circuit also disagreed with the trial court’s determinations that the “least sophisticated consumer” could not read the disputed language “without unusual strain or effort because those words are printed on the opposite side of the Letters and are upside-down and backwards[.]’”

First, it found that the letter attached to the complaint did not “utterly discredit” plaintiff’s “assertion that the language is clearly visible.”

Because the words “Collection Bureau” were “at least moderately visible[,]” and the trial court “should have viewed these exhibits with the understanding that there is always some disparity in the quality of a copy versus the actual paper[,]” the Sixth Circuit concluded that “the contested language is ‘at best—barely legible[,]’ we find that the exhibits show that the contested language is ‘at worst—barely legible.’”

Accordingly, the Sixth Circuit held that “it is reasonable to conclude that discovery will reveal that the Letters, when viewed in normal lighting, display clearly visible language that indicates that the communications pertain to collection of a debt.” Accordingly, the exhibits to the complaint did not “contradict her assertion that the words “Collection Bureau” are clearly visible.”

The Court then found that the trial court “also improperly applied the least sophisticated consumer standard in coming to its conclusion[,] reasoning that “[a] person handling or viewing one of the Letters could easily rotate the letter to read the words ‘Collection Bureau.’ … Thus, the nature of the Letters would be apparent on the face of the envelope to anyone handling the mail. … To hold otherwise would obstruct ‘Congress’s intent to screen from public view information pertinent to the debt collection … and would permit an end-run around §1692f(8) by clever envelope, paper, or font selection.”

The Sixth Circuit also disagreed with the trial court’s finding “that barring visible text printed on the Letters would lead to absurd results” because, as urged by the appellant/consumer, “a narrow construction of §1692f(8) would create absurd results by allowing debt collectors to print whatever they want on the inside of the letter, no matter how obvious from the outside, as long as they do not print it on the envelope.”

The Court could not “disregard a business name that shows on the face of a debt collection letter … merely because it is written on the inward contents of a letter. … [T]his understanding best promotes the elimination of abusive debt collection practices without causing a competitive disadvantage to debt collectors that refrain from using such practices.”

Turning to the consumer’s remaining state law claim, the Sixth Circuit held that since the trial court dismissed the plaintiff’s “CSPA claim for failure to state a claim under the FDCPA, our FDCPA analysis applies equally to her CSPA claim for remand purposes.”

Thus, the trial court’s judgment was reversed and the case was remanded for further proceedings.

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Hector E. Lora manages the firm’s Florida office and has substantial experience in all phases of complex commercial litigation, including bench and jury trials as well as appellate practice. Hector represents lenders, servicers, debt collectors and debt buyers in complex mortgage foreclosure actions, quiet title actions, federal TILA, RESPA, TCPA, and FDCPA actions and Florida FCCPA actions brought by borrowers or debtors. He also represents creditors in bankruptcy litigation, purchasers of accounts receivable or factoring companies that provide revenue-based financing to small and mid-sized businesses in collection actions, and landlords in commercial and residential evictions. Hector’s broad litigation experience includes over a decade of defending civil enforcement actions filed by the Federal Trade Commission as well as real estate contract disputes and partition actions, contested mortgage foreclosure and condominium lien foreclosure actions and the foreclosure of UCC Article 9 security interests. Hector also has advised a variety of types of businesses regarding their compliance with applicable federal and state consumer protection laws, including the Federal Trade Commission Act, the Telephone Consumer Protection Act (TCPA), the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Controlling the Assault of Nonsolicited Pornography and Marketing Act of 2003, and Florida laws governing telephone solicitation and communication. Hector received his Juris Doctor from the Georgetown University Law Center, and his undergraduate degree with honors from the University of Florida. For more information, see

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