Consumer Finance Litigation

In Caprio v. Healthcare Revenue Recovery Group, LLC, --- F.3d ---, 2013 WL 765169 (3d Cir. Mar. 1, 2013), the U.S. Court of Appeals for the Third Circuit recently held that language in a debt collection letter asking the plaintiff to "please call" if the plaintiff disputed the amount owed violated the debt validation and false representation provisions of the FDCPA. Plaintiff Ray Caprio filed a putative class action against Healthcare Revenue Recovery Group, LLC ("HRRG") alleging violations of § § 1692g and 1692e(10) of the FDCPA based on a collection letter he received that contained the following language: "If we can answer any questions, or if you feel you do not owe this amount, please call us toll free. . . ." The reverse side of the letter contained a validation notice stating that Caprio must dispute the debt in writing. The district court granted HRRG's motion for judgment on the pleadings, and Caprio appealed. Addressing the § 1692g claim, the court relied on its prior holding in Wilson v. Quadramed Corp., 225 F.3d 350 (3d Cir. 2000) and stated that a "validation notice is overshadowing or contradictory if it would make the least sophisticated consumer uncertain as to her rights." Further, the court stated that a debt collection letter that "can be reasonably read to have two or more different meanings, one of which is inaccurate" is deceptive under the FDCPA. However, the court distinguished Wilson from the present case based on its analysis of the "form" and "substance" of the letter. Specifically, the letter in Wilson presented the validation notice in the same font, size, type, and on the same page as the potentially contradictory language. Additionally, the letter in Wilson presented two separate options to the debtor -- pay or dispute the debt -- and the letter did not emphasize one option over the other. Unlike the letter in Wilson, the court determined that because "the least sophisticated debtor could reasonably believe that he could effectively dispute the validity of the debt by making a telephone call, even though such disputes must be made in writing to be effective[,]" the letter violated the FDCPA. The court noted that "please call" and the toll-free telephone number were in bold type and that HRRG's address was printed in a smaller font than the toll-free telephone number. Additionally, the court noted that the validation notice was on the reverse side of the letter. Accordingly, the court held that the letter was deceptive and the "validation notice was overshadowed and contradicted because the least sophisticated debtor would be uncertain as to her rights." Because the § 1692e(10) claim was based on the same language as the § 1692g claim, the court vacated the district court's order granting HRRG's motion for judgment on the pleadings and remanded the case. The Third Circuit's decision is yet another reminder that debt collectors are often punished for altering the statutory language contained in § 1692g. While imploring a debtor to "please call" may seem helpful for establishing an open line of communication, any language that may contradict a § 1692g notice is inviting claims from consumer attorneys. Debt collectors must be careful that demands and requests for communication do not overshadow the required language in an initial communication. 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.