The Court of Appeals for the Seventh Circuit has reversed a lower court ruling and ruled against a collection agency for using safe harbor language that it had previously deemed usable, because the context in which the agency used the language was not applicable.
In its collection letter, the defendant, Finance System of Green Bay, used the safe harbor language from Miller v. McCalla, Raymer, Padrick, Cobb, Nichols & Clark LLC, which was originally a Seventh Circuit ruling. The District Court ruled that the agency did not violate the Fair Debt Collection Practices Act by using the language, but the Appeals Court disagreed.
The safe harbor language from the Miller case reads:
As of the date of this letter, you owe $[a stated amount]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check. For further information, write to the above address or call [phone number].
The plaintiffs argued that since the creditor was not allowed to assess “late charges or other charges” under Wisconsin law, that the letter violated the FDCPA. The plaintiffs also alleged that an unsophisticated consumer could interpret the letter to mean that there was a financial benefit to sending in a payment immediately.
By alleging that fees which were illegal to be added could be tacked on to an account, the defendant violated the FDCPA, the appeals court ruled, because “[t]his is not the type of legal knowledge we can presume the general public has at its disposal.”
The Miller safe harbor language does not apply in this case, the appeals court ruled, because the Miller safe harbor language only applies when “the information he furnishes is accurate and he does not obscure it by adding confusing other information.” By adding in “late charges and other charges,” which were not applicable in this instance, the information in the safe harbor language was no longer accurate and was now misleading.
In sum, debt collectors cannot immunize themselves from FDCPA liability by blindly copying and pasting the Miller safe harbor language without regard for whether that language is accurate under the circumstances. Therefore, the district court erred by dismissing plaintiffs’ claims on this ground.