Daily Decision Deep Dive: ACA Member Secures FDCPA Victory in Illinois District Court

Providing payment options in the validation letter and one voicemail left with the consumer did not overshadow the validation period.

2/28/2019 3:30 PM

Daily Decision Deep Dive: ACA Member Secures FDCPA Victory in Illinois District Court

The Northern District of Illinois recently issued an industry favorable decision on the issue of overshadowing. In Thompson v. Harris & Harris, the court found that the validation letter and one subsequent voicemail did not overshadow the consumer’s validation rights. The facts of the case are as follows, the consumer defaulted on her medical debt and afterward, it was assigned to the Harris & Harris for collections. The debt collector sent the consumer a validation letter which contained details on how to make a payment online, by mail or by entering into a payment plan. The letter also included “charity care considerations” as well as the validation language as required by the Fair Debt Collection Practices Act.  About a month after the date on the letter, the consumer received a voicemail in which the debt collector identified itself. The consumer alleged the collection letter coupled with the voicemail was a demand for immediate payment and overshadowed her validation rights.

The court discussed both the collection letter and the voice message in its opinion. The court found that as the letter did not demand the consumer pay the debt before the expiration of the validation period, it did not overshadow the validation notice. As to the voicemail that the consumer received, the court found that, “[the consumer] does not allege that the [debt collector] demanded immediate payment from her. Instead, [she] only speculates that by leaving the voicemail, [the debt collector] was “attempting to demand immediate payment.” Without allegations that [the debt collector] did anything other than identify itself as a debt collector on the voicemail, [the consumer]’s speculative allegations about what the phone call intended are insufficient.” The court further explained that the payment plans in the letter and the detachable section coupled with the voicemail did not, “emphasize[] or carry a sense of urgency that would confuse an unsophisticated consumer…”

Hinshaw Schultz Web

As more confusion abounds from the many recent court decisions on overshadowing, this particular member victory is a breath of fresh air for the industry. Lead Attorney for the case David Schultz, partner at Hinshaw & Culbertson LLP, provided the following comment, “The first letter was a fairly benign initial communication.  The phone message was also terse and not in any way demanding.  The court agreed with this lawful, but cautious, collection approach the during the validation period.  Hopefully this provides guidance and cover to members.”

Ari Derman, Esq. General Counsel and Director of Legal Services at Harris & Harris, also provided comment on the win, “H&H is always proud to represent the industry in impactful cases. Due to the benign nature of our letter and voicemail, we were left with no choice but to fight. We rely on our compliance team to incessantly review documentation and corporate procedures to ensure that all communication platforms align with our key company goals – to engage respectfully with consumers in a straightforward and clear manner. Our painstaking efforts were validated in the instant case.  We thank David Schultz and Lindsey Conley at Hinshaw & Culbertson for their fantastic representation and guidance.” 

Aside from being an industry win, this case illustrates the delicate balance that must be achieved between the consumer’s right to dispute the debt within the 30-day period and the debt collector’s right to demand payment. The letter discussed in this case found that balance by providing the consumer with payment options without creating a false sense of urgency that would confuse the consumer into thinking she has to pay the debt without the ability to dispute it. For more information on the topic of overshadowing, ACA members can review ACA SearchPoint document #1172 Collection Efforts During the 30-day Validation Period.

ACA continues to monitor and report on court decisions related to issue confronting the debt collection industry.

David Schultz, partner at Hinshaw & Culberston LLP, is pictured above.


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