Colorado appeals court reverses district court’s ruling in favor of the consumer.
11/1/2018 17:00
Garrett v. Credit Bureau of Carbon Cnty., 2018 COA 150, 2018 WL 5073322 (Colo. App. Ct. Oct. 18, 2018)
In a case before a Colorado Appellate court, a consumer claimed he received two collection letters. The first letter provided the validation notice required under the Colorado Fair Debt Collection Practices Act (CFDCPA) which, like the FDCPA, provides a consumer 30 days to dispute the validity of the debt, and requires a consumer to send a written notice of dispute to obtain verification of the debt. The second letter arrived during the aforementioned 30-day validation period and included the bolded and capitalized statement, “WE CANNOT HELP YOU UNLESS YOU CALL.” The letter did not mention any other methods to contact the debt collector, nor did it reference or include the validation language provided in the previous letter. The consumer sued the debt collector under the CFDCPA, claiming that the second letter was misleading to the least sophisticated consumer. The district court ruled in favor of the debt collector and the consumer appealed to the Colorado Appellate court.
Disagreeing with the district court, the appellate court found the language in the second collection letter was misleading to the least sophisticated consumer. In its analysis of the letter, the court turned to a previous ruling of the Colorado Supreme Court under the CFDCPA, as well as federal case law that addressed the validation notice required under the FDCPA. The court observed that in order to meet the requirements of the FDCPA, it is not sufficient to merely provide the required language. Rather, it must be conveyed effectively, and “must not be overshadowed or contradicted by other messages or notices appearing in the initial communication from the collection agency.”
The consumer claimed that the second notice would have created confusion with respect to the consumer’s obligation to dispute a debt in writing within the requisite 30-day period due to the inclusion in the second notice of capitalized and bolded language stating, “WE CANNOT HELP YOU UNLESS YOU CALL.” The court observed there was nothing in the text of the statement that would necessarily contradict the notice of rights provided to the consumer in the initial notice. But the court found it significant that the second notice arrived within the 30-day window and did not reference the consumer’s rights in any fashion. In the view of the court, the language did more than simply invite oral communication. The court reasoned that because the statement was directed at a particular audience, i.e., “You” (the consumer) and included the use of the forceful words like “cannot” and “unless,” it could convey to a reader a strong sense of limitation, or an inability to do anything on the consumer’s behalf unless the consumer called. Therefore, the court opined that when read as a whole, the letter carried with it the implication that “we can only help you if you call.”
The debt collector argued that the least sophisticated consumer would apply the word “help” only to the means by which to resolve or pay a debt. The court rejected this argument, stating “the least sophisticated consumer could also (and, indeed, would most likely) apply the word “help” to encompass the means by which to avoid the debt in whole or in part—something that, by statute, could not be accomplished via a phone call, but could only be accomplished in writing, and within 30 days of the initial communication.” As such, the court held the statement was capable of being reasonably interpreted by the least sophisticated consumer as changing the manner in which the consumer was required by law to dispute the debt or its amount and, therefore, was deceptive or misleading in violation of the CFDCPA as a matter of law.
ACA International attorney member Dennis Barton III, managing attorney at the Barton Law Group , offered the following analysis of the court’s decision:
Collectors must have a heightened sensitivity to collection efforts made during the validation period. Anything that could be interpreted as limiting the time or method by which a consumer can otherwise dispute the debt creates exposure. Legal compliance can hinge on even a single word. Often a slight variation of language can avoid a violation. Had the letter used phrase “CONTACT US” rather than “CALL US,” the court would most likely have found no violation.
Language that creates a sense of urgency may not necessarily result in an overshadowing violation, but courts often interpret such language as being a factor in whether the letter could mislead or confuse least sophisticated consumers as to their right to dispute their debts. Avoiding violations within collection letters is especially important because of the relative ease with which consumers can bring their claims as a class action and certify a class of letter recipients. Such risks encourage annual letter reviews by legal counsel.
ACA International Members Attorney Program members interested in contributing their insights on a case for the Daily Decision Deep Dive may contact ACA International’s Communications Department at [email protected].
Dennis Barton III may be reached at:
The Barton Law Group LLC
17600 Chesterfield Airport Road
Suite 201
Chesterfield, MO 63005
636-778-9520