Consumer Finance Litigation

In Gruber v. Creditors' Protection Service, Inc., --- F.3d ---, 2014 WL 292086 (7th Cir. 2014), the Seventh Circuit Court of Appeals recently held that letters directing consumers to request verification rather than dispute the debt did not violate the FDCPA. The Seventh Circuit also held that the phrase "[w]e believe you want to pay your just debt" was mere puffery and did not violate the FDCPA. Plaintiffs filed lawsuits against separate defendants alleging that debt collection letters violated the FDCPA because they did not contain adequate notice required by section 1692g(a)(4). Specifically, plaintiffs took issue with the sentence "[i]f you notify this office within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification." Plaintiffs argued that the sentence should have included the language: "that you dispute the debt or any portion of the debt." Plaintiffs also argued that using the term "just debt" implied that the debt had been confirmed and, therefore, was misleading. Applying the unsophisticated consumer standard to plaintiffs' claims, the court found that the sentence directing consumers to request verification rather than dispute the debt did not violate the FDCPA. The court rejected plaintiffs' argument that such language was misleading, and found that a request to verify the debt constitutes a dispute under the FDCPA. The court also noted that a consumer would be entitled to the same protections under the FDCPA regardless of whether he or she requested verification of the debt or wrote to dispute the debt. Accordingly, the court held that plaintiffs' claims failed as a matter of law. The court next analyzed plaintiffs' claim that the phrase "just debt" violated the FDCPA. Plaintiffs argued that the phrase was misleading because it led consumers to think that a judgment had already been entered, and plaintiffs relied on several Seventh Circuit cases in support of their position. Rejecting plaintiffs' argument, the court found that the cases cited by plaintiffs involved letters that contained "incoherent and contradictory" language and, thus, were distinguishable from the instant case. The court found that the phrase "just debt" did not require plaintiffs to take any action with respect to the debt and merely characterized the debt. Rather, such language was puffery and did not violate the FDCPA. Accordingly, the court affirmed the dismissal of plaintiffs' claims. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.