Fifth Circuit Rules for Debt Collector in FDCPA Appeal

We rarely hear about debt collectors winning Fair Debt Collection Practices Act (FDCPA) cases at the appellate level. Perhaps that's because a debtor prevailing over the big, bad bank is a fitting end to a quixotic mission, whereas the debt collector winning is just ... boring.

But debt collectors love need lawyers, too. If you're one of the ones paying your bills with debt collector revenues, keep reading because the Fifth Circuit Court of Appeals actually ruled that a debt collection letter didn't violate the FDCPA this week.

ProCollect, a debt collector, mailed a letter to Janet McMurray attempting to collect a debt. After the opening salutation, the letter stated that account had been referred to ProCollect for collection, listed the amount that McMurray owed, detailed the payment process, and explained the life-demerits that a debtor receives when she’s reported to the credit reporting agencies.

The letter then signed off, included two lines of Spanish text on how to pay the debt online, and, after a significant amount of space, included the FDCPA-mandated, bold-typeface language about the debtor’s rights.

McMurray sued, claiming ProCollect’s letter violated FDCPA and the Texas Deceptive Trade Practices Act. She claimed that the main text of ProCollect’s letter contradicted and overshadowed the statutorily-required notice explaining her rights. The district court didn’t see what all the fuss was about, and granted summary judgment in favor of ProCollect.

Debt collectors are required, within five days of the initial communication regarding a debt, to provide consumers with a written notice that contains:

1. The debt amount
2. The creditor’s name
3. A statement that unless the consumer “disputes the validity of the debt” within 30 days, the debt collector will assume the debt is valid
4. A statement that if the consumer notifies the collector that the consumer is disputing the debt in writing within the 30 day period, “the debt collector will obtain verification of the debt [from the creditor] … and a copy of [the] verification … will be mailed to the consumer” and
5. A statement that, upon the consumer’s written request, the debt collector will give the consumer “the name and address of the original creditor, if different from the current creditor.”

If McMurray had proven that ProCollect’s letter contradicted those requirements, there would have been a problem. However, encouraging debtors to pay their debts, doesn’t count as illegal cajoling.

Here, the Fifth Circuit Court of Appeals concluded that ProCollect’s letter essentially provided warnings against continued non-payment and nothing more. Thus, the notice language in ProCollect’s letter was not overshadowed by the letter’s bad-credit warnings.

Related Resources:

• Janet McMurray v. ProCollect, Incorporated (Fifth Circuit Court of Appeals)
• There Are No ‘Harmless Errors’ in FDCPA Violations (FindLaw’s Fourth Circuit Blog)
• 3rd Circuit Says Debt Collection Attorney Violated FDCPA (FindLaw’s Third Circuit Blog)