In the

United States Court of Appeals
               For the Seventh Circuit

No. 07-1075

V ERSIA S. M C K INNEY,
                                                    Plaintiff-Appellee,
                                  v.

C ADLEWAY P ROPERTIES, INCORPORATED ,

                                               Defendant-Appellant.


             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
             No. 04 C 8248—Virginia M. Kendall, Judge.



   A RGUED O CTOBER 30, 2007—D ECIDED N OVEMBER 13, 2008




  Before M ANION, R OVNER, and S YKES, Circuit Judges.
  S YKES, Circuit Judge. This case requires us to deter-
mine whether the defendant, Cadleway Properties, Inc.,
is a “debt collector” under the Fair Debt Collection Prac-
tices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”). If it is, then
the FDCPA applies, and our second question is whether
the “validation of debt” notice Cadleway sent to the
plaintiff was clear or confusing on its face.
  Reverend Versia McKinney’s Chicago home was dam-
aged by a flood in 1996. To help with repair costs, she
2                                              No. 07-1075

obtained a disaster assistance loan from the Small
Business Administration (“SBA”). After McKinney
ceased making payments in 2002, the SBA sold the debt
to a third party, and Cadleway subsequently acquired it.
In an attempt to collect on the debt, Cadleway sent
McKinney a collection letter that included a notice of
her right to dispute and obtain verification of the debt
and of the original creditor as required by the FDCPA.
McKinney responded with this lawsuit alleging the
notice was confusing.
  The district court entered summary judgment for
McKinney, concluding that Cadleway is a debt collector
and its collection letter was confusing to the unsophisti-
cated consumer and therefore violated the FDCPA. We
agree with the former conclusion but not the latter. The
FDCPA covers debt collectors, not creditors, and these
categories are “mutually exclusive.” Schlosser v. Fairbanks
Capital Corp., 

, 536 (7th Cir. 2003); see also
15 U.S.C. § 1692a(4), (6) & (6)(F). The undisputed evid-
ence here establishes that Cadleway is a debt collector,
not a creditor. Cadleway’s validation-of-debt notice,
however, was objectively clear and not obscured by
Cadleway’s request that McKinney confirm or dispute
the amount she owed. Accordingly, we reverse the judg-
ment of the district court and remand with instructions
to enter judgment for Cadleway.


                     I. Background
  Reverend Versia McKinney’s Chicago home was dam-
aged in 1996 when a sewer backed up into her basement
due to flooding. Unable to afford the repairs, McKinney
No. 07-1075                                           3

applied for and received a disaster loan for $5,200 from
the SBA. The loan agreement authorized the SBA to
demand immediate payment of the entire balance
should McKinney fail to make a scheduled payment.
Indeed, at some point after disbursement of the loan,
McKinney was unable to keep up with the payments
and ceased making them altogether, although the SBA
never demanded that she pay the outstanding balance.
  Instead, in 2002 the SBA sold McKinney’s loan to
Lehman Capital/Aurora Loan Servicing Inc., which eventu-
ally sold it to Cadleway. Cadleway’s first contact with
McKinney was in September 2004 when it issued a col-
lection letter informing her that it had purchased the
debt and that she should begin making payments to the
new address provided. A bold-faced, underlined notice
on the front of the letter directed McKinney to read the
“Validation of Debt Notice” on the reverse side of the
letter.
  The “Validation of Debt Notice” on the back of the
letter was designed to comply with the FDCPA by inform-
ing McKinney of her statutory rights regarding the
debt. The notice stated that according to Cadleway’s
records, McKinney owed $4,370.02, all but $337.39 of
which was principal on the original loan. The notice
also stated that McKinney had 30 days to notify
Cadleway if she disputed the debt, and in that instance
Cadleway would obtain and mail to her a verification
of the debt, its amount, and the contact information of
the original creditor. The notice further stated that if
McKinney did not dispute the validity of the debt
4                                              No. 07-1075

within 30 days, then Cadleway would assume the debt
was valid. At the bottom of the notice was a form on
which McKinney was asked to “confirm this balance or
state the amount which you believe is the correct balance.”
  McKinney sent the letter to Michelle Weinberg, an
attorney with the Legal Assistance Foundation of Metro-
politan Chicago. Weinberg replied to Cadleway, asking
it to “cease all further communications regarding this
account” because Cadleway was not a licensed debt
collector and McKinney “is simply unable to pay this
debt.” McKinney then filed this action in the district
court under 15 U.S.C. § 1692k, which makes debt
collectors who violate the FDCPA civilly liable for
actual and statutory damages as well as attorney’s fees
and court costs. McKinney alleged that Cadleway’s
collection letter violated the FDCPA because an unso-
phisticated consumer would be confused about her right
to dispute the debt and obtain verification of its valid-
ity. McKinney asked only for statutory damages
and attorney’s fees; she did not claim actual damages.
  The case was initially assigned to District Judge
Ronald Guzmán, and both parties moved for summary
judgment. Judge Guzmán held that Cadleway’s valida-
tion notice was confusing on its face to the
unsophisticated consumer but did not rule on whether
Cadleway was a “debt collector” under the FDCPA or
whether McKinney’s loan was a “debt” within the
meaning of the statute.
 The case was thereafter transferred to District Judge
Virginia Kendall, and both parties again moved for sum-
No. 07-1075                                               5

mary judgment. Judge Kendall held that McKinney’s
obligation was a “debt” within the meaning of the FDCPA
and that Cadleway was a “debt collector” under the
FDCPA because it had acquired and attempted to collect
a debt that was in default at the time of acquisition. 1
Judge Kendall then entered judgment for McKinney and
later amended the judgment to award her statutory
damages of $1,000—the maximum allowed—as well as
attorney’s fees and costs.


                      II. Discussion
A. Standard of Review
  A district court’s grant of summary judgment is re-
viewed de novo. Matthews v. Milwaukee Area Local Postal
Workers Union, AFL-CIO, 

, 441 (7th Cir. 2007).
The evidence in the record must be viewed in the light
most favorable to the nonmoving party, Anderson v.
Liberty Lobby, Inc., 

, 255 (1986), and on cross-
motions for summary judgment, inferences are drawn
in favor of the party against whom the motion under
consideration was made. Hess v. Reg-Ellen Mach. Tool Corp.,

, 658 (7th Cir. 2005). When the district court
considers cross-motions for summary judgment, granting
one and denying the other, the denial of summary judg-
ment “has merged into the final judgment and is



1
  Judge Kendall’s conclusion that McKinney’s obligation was
a debt within the meaning of the FDCPA is not challenged
on appeal.
6                                               No. 07-1075

therefore appealable” as part of the appeal from the final
judgment granting the opposing party’s motion. Santaella
v. Metro. Life Ins. Co., 

, 461 (7th Cir. 1997).
Summary judgment is appropriate when “the pleadings,
the discovery and disclosure materials on file, and any
affidavits show that there is no genuine issue as to any
material fact and that the movant is entitled to a judg-
ment as a matter of law.” FED. R. C IV. P. 56(c).


B. McKinney’s FDCPA Claim
  The FDCPA was enacted to combat “abusive, deceptive,
and unfair debt collection practices.” 15 U.S.C. § 1692.
To that end, the Act regulates communications relating to
debt collection (§ 1692c), abusive practices of debt collec-
tors (§ 1692d), and using false or misleading information
in collection notices (§ 1692e). Relevant to this case is
§ 1692g, which governs a debt collector’s “initial com-
munication with a consumer in connection with the
collection of any debt” and requires, among other things,
that the debt collector provide notice of the consumer’s
right to dispute the validity of the debt and receive verifi-
cation of it. § 1692g(a). Consumers may sue to enforce the
Act’s provisions and, if successful, recover actual damages,
statutory damages, and attorney’s fees and costs. § 1692k.


1. Cadleway’s Status as a “Debt Collector”
  The FDCPA applies only to “debt collectors” seeking
satisfaction of “debts” from “consumers”; it does not apply
to “creditors.” 

. The Act defines
“creditor” as follows:
No. 07-1075                                                        7

    The term “creditor” means any person who offers or
    extends credit creating a debt or to whom a debt is
    owed, but such term does not include any person to the
    extent that he receives an assignment or transfer of a debt in
    default solely for the purpose of facilitating collection of such
    debt for another.
§ 1692a(4) (emphasis added). The Act defines “debt
collector” as follows:
    The term “debt collector” means any person who uses
    any instrumentality of interstate commerce or the mails
    in any business the principal purpose of which is the
    collection of any debts, or who regularly collects or
    attempts to collect, directly or indirectly, debts owed or
    due or asserted to be owed or due another.
§ 1692a(6) (emphasis added).
   The statutory definition of “debt collector” thus has two
subcategories. It includes any person who: (1) uses an
instrumentality of interstate commerce or the mails in “any
business the principal purpose of which is the collection of
any debts”; or (2) “regularly collects or attempts to collect
. . . debts owed or due or asserted to be owed or due
another.” This second subcategory of debt collectors refers
back to a group specifically excluded from the Act’s defini-
tion of creditors—those who receive “an assignment or
transfer of a debt in default” for the purpose of “facilitating
[the] collection of such debt for another.”
  The definition of debt collector also contains certain
enumerated exclusions, one of which is relevant here:
    The term [debt collector] does not include . . .
8                                                No. 07-1075

        (F) any person collecting or attempting to collect
        any debt owed or due or asserted to be owed or
        due another to the extent such activity . . . (iii)
        concerns a debt which was not in default at the time
        it was obtained by such person . . . .
§ 1692a(6)(F)(iii) (emphasis added).
  We have held that “[f]or purposes of applying the Act to
a particular debt, these two categories—debt collectors and
creditors—are mutually exclusive.” 

. We have also observed, however, that “for debts that
do not originate with the one attempting collection, but are
acquired from another, the collection activity related to
that debt could logically fall into either category.” 

that in such a case—one involving a debt
originated by another and subsequently acquired by the
entity attempting collection—“the Act uses the status of
the debt at the time of the assignment” to distinguish
between a debt collector and a creditor. 

draws this distinction in a rather indirect way,
however—by the exclusionary language, quoted above, in
the statutory definitions of creditor and debt collector. That
is, the definition of creditor excludes those who acquire
and attempt to collect a “debt in default,” § 1692a(4) (em-
phasis added), while the definition of debt collector
excludes those who acquire and attempt to collect “a debt
which was not in default at the time it was obtained,”
§ 1692a(6)(F) (emphasis added). So one who acquires a
“debt in default” is categorically not a creditor; one who
acquires a “debt not in default” is categorically not a
debt collector.
No. 07-1075                                                    9

   Thus, we held in Schlosser that the Act “treats assignees
as debt collectors if the debt sought to be collected was in
default when acquired by the assignee, and as creditors
if it was 

; see also Bailey v. Sec. Nat’l
Servicing Corp., 

, 387 (7th Cir. 1998) (“The plain
language of § 1692a(6)(F) tells us that an individual is not
a ‘debt collector’ subject to the Act if the debt he seeks to
collect was not in default at the time he purchased (or
otherwise obtained) it.”). We explained that “[f]ocusing
on the status of the obligation asserted by the assignee
is reasonable in light of the conduct regulated by the
statute,” which generally covers debt collection, not
debt servicing:
    For those who acquire debts originated by others, the
    distinction drawn by the statute—whether the loan
    was in default at the time of the assignment—makes
    sense as an indication of whether the activity directed
    at the consumer will be servicing or collection. If the
    loan is current when it is acquired, the relationship
    between the assignee and the debtor is, for purposes
    of regulating communications and collection prac-
    tices, effectively the same as that between the origina-
    tor and the debtor. If the loan is in default, no ongoing
    relationship is likely and the only activity will be
    collection.

. Accordingly, the purchaser of a
debt in default is a debt collector for purposes of the
FDCPA even though it owns the debt and is collecting for
itself. 

see also FTC v. Check Investors, Inc., 

, 171-74 (3d Cir. 2007) (holding that an entity
engaged in collection activity on a defaulted debt acquired
10                                                 No. 07-1075

from another is a “debt collector” under the FDCPA even
though it “may actually be owed the debt”).
  Cadleway argues that the evidence on the cross-motions
for summary judgment is insufficient to establish its status
as a debt collector. We disagree. The FDCPA does not
define “default,” but it is undisputed that McKinney’s debt
had been delinquent for at least two years when Cadleway
purchased it, and we think this suffices to establish that it
was a “debt in default” when it was acquired.2 Accord-
ingly, under Schlosser’s interpretation of the “mutually
exclusive” statutory definitions of “creditor” and “debt
collector,” Cadleway is a debt collector.


2
   The Second Circuit has observed in this context that delin-
quency and default are two distinct concepts. See Alibrandi v.
Fin. Outsourcing Servs., Inc., 

, 86 (2d Cir. 2003)
(“[C]ourts have repeatedly distinguished between a debt that
is in default and a debt that is merely outstanding, emphasizing
that only after some period of time does an outstanding debt
go into default.”). The court held in Alibrandi that because the
FDCPA does not define “default,” the default terms of the
debt transaction itself should control. 

n.5. Here, the
original loan agreement between the SBA and McKinney
provides that the SBA “is authorized to declare all or any part
of said indebtedness immediately due and payable upon the
happening of any of the following events,” including “[f]ailure
to pay any part of the principal or interest on this Note when
due.” As we have noted, it is undisputed here that at the time
Cadleway acquired this debt, McKinney had not made any
payments for at least two years. Although the SBA had not
demanded immediate full payment, McKinney had plainly
defaulted on her payment obligations.
No. 07-1075                                                   11

   Cadleway maintains there is insufficient evidence in the
record to establish that the “principal purpose” of its
business was the collection of debts or that it “regularly
collects” debts owed to “another.” § 1692a(6). As we have
discussed, however, under Schlosser, an agency in the
business of acquiring and collecting on defaulted debts
originated by another is a debt collector under the FDCPA
even though it actually may be collecting for itself. In its
answers to McKinney’s interrogatories, Cadleway admitted
to issuing nearly 3,500 letters identical to the one it sent to
McKinney during the year-and-a-half period surrounding
the collection activity in this case. It is reasonable to infer
that at least some—perhaps most—of this voluminous
collection activity related to debts, like McKinney’s, that
were in default when acquired by Cadleway. There is no
evidence in the record to support an inference more
favorable to Cadleway. Cadleway’s interrogatory answer
is therefore sufficient to establish that it “regularly collects”
defaulted debts. We agree with the district court that
Cadleway is a debt collector under the FDCPA.


2. Cadleway’s Validation of Debt Notice
  The FDCPA requires debt collectors to provide certain
information “in the initial communication” with the
consumer or “[w]ithin five days after the initial communi-
cation.” § 1692g(a). This includes the amount of the debt,
the name of the creditor to whom the debt is owed, notice
of the consumer’s right to dispute the validity of the debt
within 30 days of the communication, and to require the
debt collector to obtain verification of the debt and mail it
to the consumer. § 1692g(a)(1)-(4). The debt collector is also
12                                                 No. 07-1075

required to advise the consumer that “upon the consumer’s
written request, . . . the debt collector will provide the . . .
name and address of the original creditor.” § 1692g(a)(5).
Upon receipt of such request, or if the consumer disputes
the debt, the debt collector must “cease collection of the
debt” until a verification of the debt and the original
creditor is mailed to the consumer. § 1692g(b).
  Although the statute does not specify the manner in
which the required disclosures must be provided, we have
held, “plausibly enough, that it is implicit that the debt
collector may not defeat the statute’s purpose by making
the required disclosures in a form or within a context in
which they are unlikely to be understood by the unsophis-
ticated debtors” the statute seeks to protect. Bartlett v.
Heibl, 

, 500 (7th Cir. 1997). Impermissible
communication tactics include flat-out contradiction,
overshadowing the information with other text or format-
ting, or “failure to explain an apparent though not actual
contradiction.” 

  Whether the debt collector’s letter complies with the
statute is determined objectively; the inquiry is whether an
“unsophisticated consumer or debtor” would be confused
by the contents of the letter. Durkin v. Equifax Check Servs.,
Inc., 

, 414 (7th Cir. 2005). The unsophisticated
debtor is “uninformed, naive, [and] trusting” but is also
assumed “to possess rudimentary knowledge about the
financial world and is capable of making basic logical
deductions and inferences.” 

marks
omitted). In the normal case, the plaintiff must come
forward with more than her own confusion as evidence of
an FDCPA violation. “Rather, a plaintiff must demonstrate
No. 07-1075                                                  13

that the letter’s language unacceptably increases the level
of confusion” such that “a significant fraction of the
population would be similarly misled.” Sims v. GC Servs.
L.P., 

, 963 (7th Cir. 2006) (internal quotation
marks omitted). We have suggested that this requirement
“might be met through the use of a carefully designed and
conducted consumer survey” or appropriate expert
testimony. 

.
  In some situations, however, a debt collector’s letter may
be so clearly confusing on its face that a court may award
summary judgment to the plaintiff on that basis. 

is
apparent just from reading the letter that it is unclear . . .
and the plaintiff testifies credibly that she was indeed
confused,” then further evidence may not be necessary
provided the plaintiff “is representative of the type of
people who received that or a similar letter.” Chuway v.
Nat’l Action Fin. Servs., Inc., 

, 948 (7th Cir.
2004).
  McKinney presented no extrinsic evidence that
Cadleway’s validation-of-debt notice would be confusing
to a significant fraction of the population. Moreover, she
testified that the letter was not confusing to her. Instead, she
testified to confusion stemming from the nature of the
assistance she received from the SBA. As she put it during
her deposition: “The original materials, allegedly, was
FEMA disaster assistance. This is what confused me, that.
How did it become a loan? I’ve always been concerned
about that.” McKinney apparently assumed the money was
a grant from FEMA, not a loan from the SBA. Setting aside
the fact that any confusion in this regard was not occa-
sioned by anything in Cadleway’s collection letter,
14                                                 No. 07-1075

McKinney’s assumption was completely unwarranted; the
documents she signed from the SBA clearly identified the
transaction as a loan with an interest rate and payment
schedule. Indeed, if McKinney thought it was an outright
grant, then there would be no reason for her to have made
any payments at all on the balance. See Williams v. OSI
Educ. Servs., Inc., 

, 679 (7th Cir. 2007) (discount-
ing confusion resulting from “unrealistic, peculiar, [or]
bizarre” interpretations of collection letters).
  Regarding the letter itself, McKinney testified that she
was not confused about her right to request the identity
of the original creditor. She also said that she under-
stood the letter’s explanation of her right to request
verification of the debt from Cadleway; she said only
that she did not understand how she could calculate the
correct amount due because she did not “have those
records.” She testified generally that the letter was “am-
biguous,” which she distinguished from “conflicting.”
Cadleway’s attorney asked, “Can you point to any par-
ticular paragraph that caused you confusion about your
right to dispute the debt?” McKinney equivocated: “I
told you, it was the entire letter.” Pressed for specific
points of confusion, McKinney was unable to identify
any: “It confuses me, that they have a figure here that I do
not agree with, and I will not sign. It confuses me. Where
could they have gotten such a figure? Where did they
get it?” Generalities like this do not suffice to sustain
No. 07-1075                                                  15

the plaintiff’s burden on an FDCPA claim.3
  There is nothing on the face of Cadleway’s letter that
makes its validation-of-debt notice confusing to the
unsophisticated consumer. The validation-of-debt notice
appears on the reverse side of the letter in clear, easy-to-
read type, and contains all the disclosures required by
§ 1692g. On the front of the letter, a notice in bold-face,
underlined type specifically directs the recipient to read
the validation-of-debt notice on the back. The district
court held that the confirmation request on the bottom of
the notice rendered the entire notice confusing, but we
disagree. This section of the letter is essentially a form
for the debtor to use to confirm or dispute the debt; it asks
the debtor to either confirm the total amount owed or
dispute the total and indicate what the amount should be.
This does not contradict any of the statutory notices given
in the body of the validation-of-debt notice, which clearly
communicate the consumer’s right to dispute the debt
and require the debt collector to obtain verification of it.



3
  McKinney did testify that she did not understand the para-
graph of the notice that stated the total amount owed, including
interest and charges; that paragraph identified the amount of
principal and interest owed and also stated that “[b]ecause of
interest, late charges and other charges that may vary from day
to day, the amount due on the day you pay may be greater.”
This language is an almost exact replica of the “safe harbor”
we established in Miller v. McCalla, Raymer, Padrick, Cobb,
Nichols, & Clark, L.L.C., 

, 876 (7th Cir. 2000), for
debt collectors to satisfy 15 U.S.C. § 1692g(a)(1).
16                                                     No. 07-1075

  The district court thought the presence of this confirma-
tion provision might suggest to an unsophisticated con-
sumer that confirmation was obligatory in order to avoid
the risk of credit-rating damage. But the form permits the
consumer to either confirm the debt or to dispute it and
insert any other amount (including “zero”). The form
does nothing to imply that confirmation is obligatory.
Asking the consumer to confirm or dispute the debt—and
providing a form on which to do so—does not obscure or
overshadow the information provided earlier in the
validation-of-debt notice. That notice fully complied with
the requirements of § 1692g and did so in a manner that
would not be confusing to the unsophisticated consumer.
Because McKinney did not present any other evidence
tending to show that the notice would mislead a
significant fraction of the population, she failed to carry
her burden on her FDCPA claim.4


4
   Our conclusion in this regard encompasses both McKinney’s
burden on her own motion for summary judgment as well as
her responsive burden in connection with Cadleway’s
cross-motion for summary judgment. As our dissenting col-
league notes, there are several ways McKinney might have
established that the validation-of-debt letter was confusing.
See Dissent, n.1. She argued in her summary-judgment motion
that the letter was confusing as a matter of law to the average
unsophisticated consumer. Beyond her burden on this
motion, however, McKinney was required to demonstrate a
triable issue of fact in order to defeat Cadleway’s cross-motion
for summary judgment. She did not. It is true that cross-motions
for summary judgment do not waive the right to a trial, see
Miller v. LeSea Broad. Group, Inc., 

, 230 (7th Cir. 1996);
                                                      (continued...)
No. 07-1075                                                   17

  Accordingly, although the district court properly con-
cluded that Cadleway was a debt collector under the
FDCPA, it improperly entered judgment for McKinney on
the merits of the claim. The judgment of the district court
is R EVERSED and the case is R EMANDED with instructions
to enter judgment in favor of Cadleway.



4
   (...continued)
Zook v. Brown, 

, 1166 (7th Cir. 1984), but this rule
does not alter the respective burdens on cross-motions for
summary judgment—more particularly here, the responsive
burden of a plaintiff who moves for summary judgment and
is confronted with a cross-motion for summary judgment.
The motions are treated separately. See 10A C HARLES A LAN
W RIGHT , A RTHUR R. M ILLER & M ARY K AY K ANE , F EDERAL
P RACTICE AND P ROCEDURE § 2720 (3d ed. 1998). Cadleway
maintained that its validation-of-debt letter was not con-
fusing on its face, McKinney herself was not confused (or her
vague claim of confusion was insufficient to defeat summary
judgment), and the letter would not have confused other
average consumers. Accordingly, to defeat Cadleway’s motion,
McKinney could not simply rely on her pleadings and her
argument that the validation-of-debt letter was confusing as
a matter of law; she was required to establish a triable issue
on whether the average consumer would have been confused.
We have concluded that McKinney failed to carry her burden
of establishing confusion as a matter of law and therefore
summary judgment in her favor was improperly entered.
Because she also failed to produce any evidence of confusion
(e.g., evidence that she was confused and a significant fraction
of the population would be similarly confused), she failed
to carry her burden of establishing a triable issue, and
Cadleway was entitled to judgment as a matter of law.
18                                               No. 07-1075

   M ANION, Circuit Judge, concurring in part and con-
curring in the judgment. I agree with the court’s well-
reasoned analysis that the validation-of-debt notice
Cadleway sent McKinney does not run afoul of the
FDCPA. That McKinney herself does not claim to have
been confused by the notice is telling. The notice is
straightforward. It contains all the disclosures required
by 15 U.S.C. § 1692g. It is in a normal, reasonably sized
font. And it allows a consumer either to confirm the total
amount owed or indicate that the total amount owed
listed on the notice is incorrect and provide the correct
amount, including $0.
  Given the adequacy of the notice Cadleway sent
McKinney, we need not resolve the question of whether
Cadleway is a debt collector. But since the court
discusses the issue, it is necessary to point out that neither
the statute nor our prior precedent dictates that we con-
clude that Cadleway qualifies as a “debt collector” under
the FDCPA. As we observed in Schlosser, in a case such as
this—where the debt did not originate with the party
attempting collection—Cadleway “could logically fall
into either category,” creditor or debt collector, because
the statutory definition of a creditor includes “any
person . . . to whom a debt is owed.” Schlosser v. Fairbanks
Capital Corp., 

, 536 (7th Cir. 2003) (quoting
15 U.S.C. § 1692a(4)). The court resolves that ambiguity by
referencing the exclusionary language in the FDCPA’s
definition of a creditor: “[the] term [creditor] does not
include any person to the extent that he receives an
assignment or transfer of a debt in default solely for the
purpose of facilitating collection of such debt for another.”

; 15 U.S.C. § 1692a(4). But that passage does
No. 07-1075                                               19

not automatically exclude those, like Cadleway, who
“receive[ ] an assignment or transfer of a debt in default”
from being a creditor just because the debt on which they
are attempting to collect was in default. Rather, that
exclusionary portion of the FDCPA’s definition of a
creditor (as well as the mirror-image provision in the
FDCPA’s definition of a debt collector) labels an entity “not
a creditor” (and therefore a “debt collector”) only if the
entity is attempting to collect a debt in default “for an-
other.” 15 U.S.C. § 1692a(4) (emphasis added); see 

  In this case, when Cadleway contacted McKinney, it
was not attempting to collect a debt in default “owed or
due or asserted to be owed or due another.” 

(emphasis added). It was collecting on
a debt it had purchased from Lehman Capital—a debt it
now owned and was collecting on its own behalf. Cf.
Bailey v. Sec. Nat’l Servicing Corp., 

, 386 (7th
Cir. 1998) (defendant was servicing loans on behalf of
private investors who had purchased the loans from
HUD). To be a debt collector, the statute requires that
Cadleway be collecting on a debt “for another.” 15 U.S.C.
§ 1692a(4). Since Cadleway was collecting on a debt it
now owned for itself, it should not be considered a debt
collector, regardless of whether or not McKinney’s loan
was in default.
  At first blush, our decision in Schlosser v. Fairbanks
Capital Corp., 

(7th Cir. 2003), appears to
inadvertently redact the FDCPA’s requirement that, to be a
debt collector, the party attempting to collect the debt
must be doing so “for another.” Not so. True, this court in
20                                                    No. 07-1075

Schlosser concluded that the defendant, Fairbanks
Capital Corp., was a debt collector under the FDCPA
despite the fact that it owned the debt upon which it was
attempting to collect. But the question of whether Fair-
banks was a debt collector despite not attempting to
collect the debt “for another” never came up in Schlosser.
Rather, this court only addressed the narrow question of
whether Fairbanks, which in its collection letter had held
itself out to be a debt collector, could be considered a
“creditor” under the Act when the plaintiffs were not
in fact in default on their loan—even though Fairbanks
had believed the plaintiffs to be in default at the time it
had sent its notice. 

. The district
court had held “that under the plain language of the
statutory definition, [Fairbanks was] not a debt collector
because the [plaintiffs’] loan was not actually in default
when Fairbanks acquired it.” 

with
that statutory interpretation, holding only that Fairbanks
could be a debt collector because it attempted to collect on
a debt that it believed to be in default at the time it ac-
quired the debt. See 

Importantly, we did not
touch on the issue of whether a party attempting a col-
lection, like Fairbanks or Cadleway, ought not to be
considered a “debt collector” under the FDCPA because
it then owned the debt that it was attempting to collect
and was not therefore collecting the debt “for another.”
That issue was outside the scope of what this court
in Schlosser was addressing, and we did not consider it.1


1
  Unlike this circuit in Schlosser, the Third Circuit did directly
confront this issue in F.T.C. v. Check Investors, Inc., 

                                                      (continued...)
No. 07-1075                                                      21

  We need not consider it here either; it is not necessary
for the resolution of this case. Even assuming that
Cadleway met the statutory definition of a debt collector,
Cadleway’s validation-of-debt notice was objectively
clear, as explained in Part II.B.2 of the court’s cogent
opinion, and McKinney therefore loses. But because
the court has chosen to address the issue of whether
Cadleway qualifies as a debt collector, I must respectfully
disagree with the court’s resolution of the question.




1
   (...continued)
(3d Cir. 2007), but its analysis is flawed. The Third Circuit
never refuted the appellant’s statutory argument that it could
not be a debt collector because it was owed the debt upon
which it was collecting and was not therefore collecting the
debt “for another.” 

(citing 15 U.S.C. § 1692a(4)). The
Third Circuit even went so far as to admit that the appellant
“appear[ed] . . . to satisfy the statutory definition of a creditor”
and that “focusing on the status of the debt when it was ac-
quired overlooks the fact that the person engaging in the
collection activity may actually be owed the debt and is,
therefore, at least nominally a creditor.” 

Nevertheless,
it relied on Schlosser—a case that never directly addressed the
issue—and inconclusive language from the legislative
history (used to override the definite language in the statute)
to find that the appellant was a debt collector. See 

As explained above, such a finding completely ignores the
plain text (“for another”) of both the statutory definition of
a debt collector and the exclusionary language in the
statutory definition of a creditor.
22                                              No. 07-1075

  R OVNER, Circuit Judge, concurring in part and dissenting
in part. Although I agree with the majority opinion
that Cadleway was a debt collector as defined in the
Fair Debt Collection Practices Act, I disagree with its
conclusion that the debt collection letter was not confusing.
Judge Guzmán below determined that any reasonable
jury would conclude that the unsophisticated consumer
would be confused by the form. My colleague is worlds
apart, finding that there is nothing confusing on the face
of the letter at all. I find the latter position untenable.
  The majority, the court below, and I all agree that the
standard validation notice set forth in the first five para-
graphs of the letter sent to Versia McKinney correctly
informed the debtor that she had thirty days to dispute the
validity of the date. To so dispute a debt, one only need
write a letter to Cadleway at the indicated address and
state simply, “I dispute the debt.” These four words
alone activate all of Cadleway’s obligations under the
FDCPA. The last paragraph, however, asks debtors to do
more. It asks the debtor to confirm the amount of the
debt, that is, to list a specific amount that the debtor
agrees is owed, and the implied consequence for failing
to do so is a damaged credit rating. Perhaps a savvy debtor
might understand that the confirmation portion of the
requirement is optional. I surely would not have and for
the reasons I describe below, I do not think an unsophisti-
cated consumer would either.
  Imagine a not uncommon debtor who has dribbled out
payments in cash and money orders as she is able—ten
dollars stuffed into an envelope here, fifteen there—and
No. 07-1075                                                      23

who may have been less than precise in her record keep-
ing. She knows that she owes something, and she knows
that it is less than the amount stated by the creditor, but
she does not know precisely how much less.1 She cannot


1
   In fact, such is the case with McKinney herself. She explained
that she did not understand how she could calculate the correct
amount because she did not have the records. I include this
example in a footnote, because I wish to de-emphasize
McKinney’s actual experience for the following reasons: There
are two ways of demonstrating that a debt collection letter
is confusing. One is to demonstrate that it is confusing on its
face. The second is to demonstrate that it would be confusing
to the average unsophisticated consumer. Durkin v. Equifax
Check Servs., Inc., 

, 414-15 (7th Cir. 2005) (“In some
situations, when an FDCPA violation is so ‘clearly’ evident on
the face of a collection letter, a court may award summary
judgment to the FDCPA plaintiff.”). In either case, the actual
confusion of the plaintiff, therefore, is irrelevant unless there
is also some evidence presented that the plaintiff is representa-
tive of the group of unsophisticated consumers. Avila v.
Rubin, 

, 227 (7th Cir. 1996) (“because [the state-
ments in the collection letter] are inconsistent and
contradictory . . . our finding that the defendants violated
§ 1692g, without reference to actual consumer confusion, is
appropriate.”); Bartlett v. Heibl, 

, 501 (7th Cir. 1997)
(“the question whether a dunning letter violates the Fair Debt
Collection Practices Act does not require evidence that the
recipient was confused—or even, as we noted earlier, whether
he read the letter”). In Chuway v. Nat’l Action Fin. Servs., Inc.,

, 948 (7th Cir. 2004), Judge Posner states that no
further evidence of confusion is necessary if the letter is confus-
                                                      (continued...)
24                                                    No. 07-1075

state that the amount she owes is “zero,” as she knows
this is not true. If she were to guess an amount, she would
be making an admission (and probably an incorrect one)
as to her amount of debt. What is she to do? The
FDCPA relieves her of this burden by requiring only that
she state “I dispute the debt.” Cadleway’s letter puts an
additional burden on her and implies that her failure
to comply will result in damage to her credit rating.
  The majority opinion concludes that the form does
nothing to imply that confirmation is obligatory. To the
contrary, everything about the letter indicates otherwise.
The clear direction in the last paragraph of the letter is
to “confirm the balance or state the amount you believe
is correct.” It is then followed by a form that contem-
plates exactly such a confirmation. It states:
     The total amount owed as of September 24, 2004 of
     $___ is confirmed.



1
  (...continued)
ing on its face, and the plaintiff testifies credibly that she
was indeed confused. 

Although he cites
several cases for the former proposition, he cites none for the
latter. And indeed in his earlier opinion in Bartlett, he notes that
the FDCPA does not require evidence that the recipient was
confused or even that the recipient read the dunning letter.
This is, of course, true because the test for confusion is an
objective one. The majority opines at length about the evidence
that the collection letter was not confusing to McKinney. This is
a red herring. We have no evidence that McKinney was or was
not representative of the unsophisticated consumer.
No. 07-1075                                             25

   The amount owed is incorrect. The total amount
   owed should be $___.
If Cadleway merely had wanted to help creditors by
providing a form to dispute the debt it would have pro-
vided a check box option that stated, “G I dispute this
debt.” This letter is relying on a consumer’s natural
inclination to fill out a form provided in a letter rather
than dissect the dense text of the correspondence to
determine first, that confirming is different than dis-
puting the debt, and second, that she cannot use the
form, but must create her own letter from whole cloth in
order to dispute the debt. That form, moreover, contradicts
the requirements of the FDCPA and puts the burden on
the consumer rather than the debt collector to deter-
mine the correct amount of debt owed. The confusion is
compounded by the implication that failure to confirm
the amount of the debt will result in a damaged credit
rating. Ignoring the form thus appears to lead to detrimen-
tal consequences. The direction, the nature of the form,
and the implied threat together indicate that such a con-
firmation is indeed required. And that requirement is dif-
ferent from, and in some cases directly contrary to, the
requirements of the FDCPA. A debt collector may not
overshadow or contradict correct FDCPA information
with other messages sent with the validation notice.
Chauncey v. JDR Recovery Corp., 

, 518 (7th Cir.
1997). The option to write “0” next to “total amount
owed”—an option to which the majority points—does
nothing to alleviate the problem. In particular, for the
debtor who thinks she owes some amount of debt, disputes
the amount asserted by the collector, but has no basis
26                                              No. 07-1075

to determine an exact correct amount, the form is
nothing but confounding.
   Judge Guzmán described the confusion in slightly
different, although no less compelling terms. The valida-
tion notice portion of the letter (the first five paragraphs)
informs the plaintiff how to dispute the debt and that
it must be done within thirty days. The consequence of
failing to dispute the debt is that Cadleway may assume
that the entire debt is valid. The confirmation portion
(the last paragraph) instructs debtors that they must
confirm (rather than dispute) the debt but provides no
time line for doing so. (R. at 47, p.6) The implied conse-
quence for failing to confirm the debt is a damaged credit
rating. 

the two portions therefore differ in
(1) the action required (dispute vs. confirm), (2) the time
frame for action (thirty days vs. no stated time limit), and
(3) the consequence for failing to act (the debtor will
assume the validity of the debt vs. an implication that
the creditor’s credit rating will suffer).
  Judge Guzmán concludes that the two provisions
taken together could be interpreted to mean (1) that the
debtor has thirty days to dispute or confirm the debt
and failure to do so within that time frame will lead
Cadleway to assume the entire debt is valid and to
report the entire debt as unpaid to the credit bureau; or
(2) that the debtor has both the option to dispute the
debt within thirty days and the obligation to confirm
the debt within an unspecified amount of time and that
failure to do the former will lead the defendants to
assume that the debt is valid and failure to do the latter
No. 07-1075                                               27

will cause them to report the entire debt as unpaid to
the credit bureau. 

district court points out, the first interpreta-
tion requires the reader to conclude that the words
dispute and confirm are synonymous and that the confir-
mation provision is just an elaboration of the validation
notice. 

court concluded that only “a savvy
consumer would draw those conclusions from this let-
ter. But an unsophisticated consumer, faced with a letter
that separately discusses the debtor’s option to dispute
and apparent obligation to confirm and sets forth
different consequences for the failure to do each, would
not.” 

concluded that an unsophisticated
consumer would reasonably conclude that disputing and
confirming are separate acts and that failure to do the
latter would damage her credit rating. 

agrees with Judge Guzmán that disputing
and confirming are indeed separate acts (“the form
permits the consumer to either confirm the debt or to
dispute it,” ante at 16 (emphasis in original)), but con-
cludes that the form does nothing to imply that confirma-
tion is obligatory. As I concluded above, however, the
letter says nothing about an option to confirm, and even a
more sophisticated consumer would view the tone and
form of the letter as a whole as requiring confirmation. Fur-
thermore, even a letter that explicitly stated “you also
have the option, but are not required to confirm the
amount of debt so that we can report it to the credit
bureau in accordance with 15 U.S.C. § 1681,” would not
relieve the confusion. “A letter can be confusing even to
28                                                No. 07-1075

a sophisticated reader though it does not contain an
outright contradiction.” Chuway v. Nat’l Action Fin. Servs.
Inc., 

, 949 (7th Cir. 2004); see also Johnson v.
Revenue Mgmt. Corp., 

, 1060 (7th Cir. 1999)
(the failure to explain an apparent though not actual
contradiction can induce confusion). Even the statement
that confirmation is optional would leave the consumer
scratching her head wondering: Is this option different
from the option to dispute the debt? Must I dispute
the debt with a specific numeric figure? Will I be
reported to the credit bureau if I dispute but do not
confirm the debt? If I confirm the debt with an amount
lower than the amount stated, is the debt collector
still obliged to cease collection of the debt until a verifica-
tion of the debt is mailed to me? The confirmation
portion of the letter raises all of these questions but
leaves them unanswered. Not even I know the answer
without resorting to legal research. This surely cannot
be the standard we require of the unsophisticated con-
sumer. The confirmation portion of the letter is clearly
confusing on its face. I therefore respectfully dissent.




                            11-13-08