SAYLOR, District Judge.
This is an action under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p, ("FDCPA"). It arises out of a one-page collection notice sent by Credit Collection Services ("CCS") to James F. Sullivan in August 2009. Sullivan has brought an action against five defendants: Credit Control Services, Inc.; CCS Holding Business Trust; Steven Sands; David Sands; and Donna Ramsdell. The complaint alleges seven separate violations of the FDCPA, all arising from the single notice. Specifically, the complaint alleges that the notice (1) falsely
Defendants have jointly moved to dismiss the entire complaint. For the reasons set forth below, the motion will be granted.
In August 2009, James F. Sullivan received a "WARNING NOTICE" from CCS concerning a $77.68 debt that he allegedly owed to the Government Employees Insurance Company. (Compl. ¶ 12).
At the top of the document was a header. In bold, capitalized letters were the words "CREDIT COLLECTION SERVICES." (Def.'s Mem. Ex. A). Below that appeared the following introduction: a Newton, Massachusetts address; weekly hours of operation; a "Self Service" website of www.warningnotice.com; and a toll-free number. (Id.).
Below that, on the left-hand side of the document, was a bar code and plaintiff's name and address. On the right-hand side was the date, a file number, and a "CANCEL DATE." (Def.'s Mem. Ex. A).
A gray text bar followed, which contained the following language: "REGARDING: GOVERNMENT EMPLOYEES INSURANCE COMPANY ... AMOUNT DUE: $77.68." (Id.). Under that, a black text bar contained the words "WARNING NOTICE—WARNING NOTICE" in larger white font. (Id.). Another gray text box appeared under that, with the following language inside it:
(Id.).
(Id.). The remainder of the Notice provided information on the availability of e-mail messaging, mailing instructions for payment or correspondence, and payment options. (Id.).
On a motion to dismiss under Fed. R.Civ.P. 12(b)(6), the Court "must assume the truth of all well-plead[ed] facts and give the plaintiff the benefit of all reasonable inferences therefrom." Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir.2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.1999)). To survive a motion to dismiss, the plaintiff must state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). That is, "[f]actual allegations must be enough to raise a right to relief above the speculative level, ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 555, 127 S.Ct. 1955 (citations omitted). "The plausibility standard is not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). Dismissal is appropriate if plaintiff's well-pleaded facts do not "possess enough heft to show that plaintiff is entitled to relief." Ruiz Rivera v. Pfizer Pharms., LLC, 521 F.3d 76, 84 (1st Cir.2008) (quotations and original alterations omitted).
The FDCPA was enacted in 1978 to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692. Plaintiff contends that defendants violated the FDCPA by providing
Most circuits have applied a "least sophisticated consumer" standard in assessing whether a debt collector's communication is deceptive or misleading. See, e.g., Lewis v. ACB Bus. Servs., 135 F.3d 389, 400 (6th Cir.1998); Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2d Cir.1993); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.1991); Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1175 (11th Cir.1985); Baker v. G.C. Servs. Corp., 677 F.2d 775, 778 (9th Cir.1982). This is an objective standard, based on "whether the `least sophisticated consumer' would be deceived by the collection practice." Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 236 (2d Cir. 1998). The standard is intended to vindicate the statutory purpose of protecting vulnerable consumers from deceptive or misleading collection tactics. See Clomon, 988 F.2d at 1319 (noting that the standard "is grounded, quite sensibly, in the assumption that consumers of below-average sophistication or intelligence are especially vulnerable to fraudulent schemes").
As the Seventh Circuit has observed, in practice courts do not literally apply the "least sophisticated consumer" standard. See Chuway v. National Action Fin. Servs., Inc., 362 F.3d 944, 948-49 (7th Cir.2004) (noting that the least sophisticated consumer "cannot even read, for the literacy rate in the United States is not 100 percent"). To eliminate the "incongruity" between what the standard literally demands and the way it is interpreted in practice, the Seventh Circuit has adopted a different formulation that looks to whether "an unsophisticated consumer" would be deceived or misled by the communication. Gammon v. GC Servs. Ltd. P'ship, 27 F.3d 1254, 1257 (7th Cir.1994). Under the "unsophisticated consumer" standard, "statements are not ... misleading unless a significant fraction of the population would be similarly misled." Veach v. Sheeks, 316 F.3d 690, 693 (7th Cir.2003) (describing the "unsophisticated consumer" as one who is "uninformed, naive, or trusting"); accord Duffy v. Landberg, 215 F.3d 871, 874-75 (8th Cir.2000) (applying the unsophisticated consumer standard).
The Fifth Circuit has commented that the unsophisticated consumer and the least sophisticated consumer standards "serve[] the same purpose and ... would lead[] to the same results in most cases." Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir.1997). That circuit's formulation encompasses both standards, but assumes that the "plaintiff-debtor is neither shrewd nor experienced in dealing with creditors." Goswami v. American Collections Enter., Inc., 377 F.3d 488, 495 (2004). While this hypothetical debtor may be "of below average sophistication or intelligence," he is not "tied to `the very last rung on the sophistication ladder.'" Taylor, 103 F.3d at 1236 (quoting Gammon, 27 F.3d at 1257).
This Court agrees with the Seventh Circuit's approach. In order to be workable, the standard must presume some level of sophistication and intelligence on the part of the consumer.
Finally, because both the "least sophisticated consumer" and the "unsophisticated consumer" standards are objective standards, both necessarily incorporate the concept of reasonableness. See Gammon, 27 F.3d at 1257 (noting that the "unsophisticated consumer" standard "allow[s] a reasonableness inquiry to ensure that debt collectors [a]re not liable for `unrealistic or peculiar interpretations' of collection letters"); Clomon, 988 F.2d at 1319 (noting that in applying the "least sophisticated consumer" standard, "courts have carefully preserved the concept of reasonableness," and that courts have "consistently applied" the standard "in a manner that protects debt collectors against liability for unreasonable interpretations of collection notices.").
Accordingly, the Court will assess whether the Notice would have deceived or misled an unsophisticated consumer. For the reasons that follow, the Court finds that the Notice sent by CCS to plaintiff does not violate 15 U.S.C. § 1692 as a matter of law.
Section 1692e(1) of the FDCPA prohibits "[t]he false representation of implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State including the use of any badge, uniform, or facsimile thereof." Id. § 1692e(1). Plaintiff contends that defendants violated § 1692e(1) by (1) capitalizing on the original creditor's identity ("Government Employees Insurance Company") and (2) by stating that "[t]his notice and all further steps undertaken by this agency will be in compliance with applicable State and Federal laws." (Compl. ¶ 44).
Plaintiff contends that the use of the name "Government Employees Insurance Company," rather than the usual acronym "GEICO," created the implication that the defendants were affiliated with the government. That argument is without merit for multiple reasons.
First, 15 U.S.C. § 1692g(a)(2) requires creditors to provide the debtor with "the name of the creditor to whom the debt is owed" in the initial correspondence. The debt collector was therefore required to include the name of the creditor. Plaintiff contends that the acronym "GEICO" should have been used on the Notice because it is more publicly recognizable as a result of its use in commercials and on the company's website. But the question is not what name is more commonly used by the company; it is whether the use of the formal name of the creditor creates a false impression that the debt collector is affiliated with the government. Here, it does not.
Second, in this context, the word "Government" did not suggest that the communication came from the United States government. Certainly the term "Government" appears in GEICO's name, but the word "Company" does as well. A title that includes the word "Company" plainly suggests that the entity is a private corporate entity.
Finally, the Notice stated, under the section entitled "Federal Law," that "[t]his communication has been sent by a debt collector." This language was not buried in small print, nor was it hidden on the back of the page. Rather, it appeared in the same size font as the other text in the Notice (excluding the words "Warning Notice") and appeared on the first (and only) page of the Notice. Even an unsophisticated consumer would not equate "debt collector" with "federal government."
Plaintiff also contends that defendants' use of the word "agency," combined with the representation that the Notice was "in compliance with state and federal laws," created an implication that CCS was associated with the government.
Of course, the word "agency" does, in some contexts, suggest an agency of the government. But the word has multiple other meanings, and particularly so in the context of debt collection. The term "collection agency" is a term of art, normally referring to a third-party that attempts to collect a debt on behalf of (that is, as an "agent" of) a creditor in return for a percentage of the amount collected. Thus, for example, the website of the Federal Trade Commission—which describes itself as "the nation's consumer protection agency"—has a "Facts for Consumers" section concerning the FDCPA that, among other things, states that the statute applies to "collection agencies."
The Court thus finds as a matter of law that the Notice did not improperly suggest affiliation with the government in violation of 15 U.S.C. § 1692e(1).
Section 1692e(2)(A) prohibits "[t]he false representation of ... the character, amount, or legal status of any debt." 15 U.S.C. § 1692e(2)(A).
Plaintiff has cited no case law in support of that argument. In any event, the argument reads far too much into the phrase "warning notice." In context, the phrase is plainly intended to attract the reader's attention. It was not legally necessary to use polite phrases, such as "kindly take notice," to achieve that result. Nor does the word "warning" suggest that the recipient of the letter has already violated some legal or regulatory requirement—the term "warning" normally suggests a possible future consequence, not a past problem.
It is true, of course, that the word "warning" suggests that some negative consequence might befall the reader if he takes a certain action (or fails to take a certain action). The principle behind a warning is that an individual may be able to avoid those negative consequences. Here, such potential negative consequences did in fact exist. They are not explicitly stated, but they would have been obvious to even an unsophisticated consumer—for example, further attempts to collect the debt, or civil litigation. Under the circumstances, the use of the phrase "warning notice" was not misleading or deceptive.
In short, the claim under § 1692e(2)(A) is without basis under the law, and will be dismissed.
Section 1692e(9) prohibits "[t]he distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval." Plaintiff's only argument in support of this claim is that the name "Government Employees Insurance Company" was used on the Notice, when the acronym "GEICO" should have been used.
Courts have generally limited the application of § 1692e(9) to egregious situations where the debt collector overtly impersonates a government agency or where it attempts to hide its identity by using a false alias. See Gradisher v. Check Enforcement Unit, Inc., 210 F.Supp.2d 907, 914 (W.D.Mich.2002) (finding violation where debt collector used letterhead and envelopes of sheriff's office and failed to disclose its true name); Wiener v. Bloomfield, 901 F.Supp. 771, 776-77 (S.D.N.Y. 1995) (finding violation where debt collector
Here, the Notice did not make any reference to a government agency. It was printed on CCS letterhead and clearly identified the debt collector's name and address in large bold letters at the top of the page. Moreover, it clearly stated that "[t]his communication has been sent by a debt collector" in the middle of the first and only page, in normal size font. For all of these reasons, the claim that defendants falsely represented that the Notice was sent by a government agency is without merit.
Section 1692e(10) prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." 15 U.S.C. § 1692e(10).
A violation of § 1692e(10) may occur when a collection document contains objectively false statements. See Martin v. Sands, 62 F.Supp.2d 196, 201 (D.Mass. 1999). Plaintiff alleges that two statements in the Notice were objectively false.
First, he challenges the statement "[t]his notice and all further steps undertaken by this agency will be in compliance with applicable state and federal Law(s)." To the extent that this constituted a promise as to how CCS intended to act in the future, it is not objectively false. To the extent that this was a description of whether the notice complied with applicable law, it is objectively true. The kinds of untruths that the courts have been concerned with are those that would intimidate or deceive an unsophisticated debtor and cause him to pay off a debt that he might have otherwise appropriately challenged. The statement cited is not likely to intimidate plaintiff into paying off his debt, nor is it one that was intentionally designed to deceive him. See Martin, 62 F.Supp.2d at 201; Bentley, 6 F.3d at 62.
Plaintiff's second challenge is to the following language: "In accordance with Federal Law, the following warning notice is required. This is an attempt to collect a debt and any information obtained will be used for that purpose." It appears that plaintiff is challenging the categorization of the statement as a "warning" rather than a "disclosure." The language that plaintiff challenges is nearly identical to the language that defendants were required to include in their first written communication with plaintiff under § 1692e(11).
Section 1692e(11) requires a debt collector "to disclose in the initial written communication with the consumer ... that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose...." 15 U.S.C. § 1692e(11). Both parties agree that the § 1692e(11) disclosure appeared in the Notice twice—once within the highlighted text box and once under the heading "Federal Law." (Pl.'s Mem. at 6).
In this case, the "Warning Notice" heading was used to make the importance of the Notice apparent to the debtor. It was not used to distract or confuse the debtor in such a way that he would fail to understand that the Notice was sent by a debt collector. In fact, CCS disclosed that the Notice was sent by a debt collector not once, but twice. Far from trying to hide the nature of the communication, CCS was attempting to draw attention to it through the language that it used. The Court therefore finds as a matter of law that the words "Warning Notice—Warning Notice" located at the top of the Notice did not overshadow the required disclosure under Section 1692e(11).
Section 1692f provides that "[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." 15 U.S.C. § 1692f. Plaintiff contends that the "acts and practices complained of [in the complaint]" constitute violations of this provision. (Compl. ¶ 67).
Section 1692f generally prohibits unfair and unconscionable behavior, and also enumerates specific categories of conduct that would amount to a violation of the provision.
Section 1692g requires debt collectors to present a debt-validation notice to the debtor within five days of the initial communication with him, if not in the initial correspondence itself. Although plaintiff concedes that the proper validation language was included in the Notice, he alleges that the overall content of the Notice overshadows his right to dispute the debt. (Compl. ¶ 72). In particular, plaintiff contends that the following parts of the Notice overshadow his right to dispute the debt: (1) the words "WARNING NOTICE—WARNING NOTICE" toward the top of the page; (2) the Notice's request for payment via mail or internet; (3) the listing of five possible actions that the debtor could take in response to the Notice, none of which include disputing or requesting verification of the debt; (4) and the placement of the validation notice under the heading "Federal Law," where it is less likely to be read. The Court finds as a matter of law that none of these elements have the effect of improperly overshadowing the debtor's right to dispute the debt.
Here, the language in large type, which plaintiff asserts is a headline, stated "WARNING NOTICE—WARNING NOTICE." It does not demand immediate payment. It does not accuse the recipient of wrongdoing. Also, the font used for the "headline" was larger than the rest of the font on the page, but only slightly so. It was written in white font in a black text box, not a bright red font as in Miller. See 943 F.2d at 483. Far from being the only capitalized font used on the page, many other sections of the Notice—including a section discussing debtors' rights— are also written in capitalized font.
Plaintiff's contention that the Notice's request for payment by mail or internet is improper is equally lacking in weight. While the FDCPA sets out to protect debtors from unfair or manipulative debt collection practices, a debt collection agency obviously has the right to request payment of the outstanding debt. Indeed, that is the entire goal behind sending the communication. A debt collector's short and plain request for payment does not constitute a violation of § 1692g.
Plaintiff also asserts that other language in the Notice overshadowed the validation notice because it provided five options for the debtor to pursue, none of which includes requesting validation of the debt. However, what the Notice actually says is "Self service menu options [on our website] include: . . ." (Def.'s Mem. Ex. A). The Notice does not state or imply that these five bullet points are the only options that a debtor can pursue. Rather, the
Finally, the plaintiff asserts that the validation notice was somehow hidden within the language of the Notice. This is simply not the case. The notice appears in the same type face, font, and color as the rest of the writing on the page. It stands out very clearly because it is printed in black font on a white background. The notice does not appear on the back of the page, or even at the bottom of the page. Rather, it appears exactly in the middle of the page. The placement of the validation notice was not improper as a matter of law.
For the foregoing reasons, defendants' motion to dismiss is GRANTED.
