Section 1692e(10) of the Fair Debt Collection Practices Act (“FDCPA”) was enacted to thwart abusive, false, or misleading debt collection practices. It provides in relevant part:
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
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(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
Federal Courts must evaluate any potential deception in the letter under an unsophisticated or least sophisticated consumer standard. Taylor v. Perrin, Landry deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir.1997). That is, in determining whether the debt collector’s actions are deceptive under the FDCPA the court must assume that the plaintiff-debtor is neither shrewd nor experienced in dealing with creditors. This standard serves the purpose of protecting all consumers, "including the inexperienced, the untrained and the credulous, from deceptive debt collection practices[.]" Id. At the same time a court does not consider the debtor as tied to the "very last rung on the [intelligence or] sophistication ladder." Id. (internal quotation marks omitted). The court reviews the potential deceptiveness of ACEI's representations according to this standard.
In Goswami v. American Collections, Inc. we see the operation of the FDCPA against misleading letters from debt collectors. There, the debt collector wrote to the debtor and the debtor sued under the FDCPA. The letter stated, falsely, that "only during the next thirty days, will our client agree to settle your outstanding balance due with a thirty (30%) percent discount off your above balance owed." (Emphasis added). In actual fact, Capital One had authorized ACEI to give debtors such as Goswami a 30% discount at any time, not just for a period of thirty days. In fact, ACEI was authorized to offer a 50% discount at the time Goswami received the collection letter in question. The statement in the collection letter is untrue and makes it appear that Capital One's offer of a 30% discount was a one-time, take-it-or-leave-it offer that would expire in thirty days. The obvious purpose of the statement was to push Goswami to make a rapid payment to take advantage of the purported limited time offer.
American Collections argued that courts have been eager to allow debt collection agencies to offer settlement discounts to debtors and that the settlement offer in that case should therefore be permitted. Courts favor such settlement offers because they "result in the resolution of the debt without resorting to litigation, saving all parties 496*496 involved the needless cost and delay of litigation[.]" Lewis v. ACB Business Servs., Inc., 135 F.3d 389, 399 (6th Cir.1998). Federal courts generally have agreed it is important to permit collection agencies to offer settlements, however, that policy consideration does not remove collection agencies' obligation under the FDCPA to deal in a non-deceitful manner. A collection agency may offer a settlement; however, it may not be deceitful in the presentation of that settlement offer, as ACEI was in that case. ACEI made false or misleading statements about the settlement authority it held from Capital One both in the discount it was authorized to offer and the time within which Goswami was allowed to accept the offer. ACEI's deception is actionable under the FDCPA and is not excused because it is part of a debt collector's settlement offer.
If these facts sound familiar to you then you might have a claim under the FDCPA against the debt collector. Contact Seth Rosenberg at Smith & Rosenberg, PLLC at email@example.com for a free consultation to see if you have been the victim of false or misleading debt collection efforts.