The Court of Appeals for the Eighth Circuit has upheld a summary judgment ruling in favor of a collection law firm that was sued by a former debt collector who has sued a number of other agencies for allegedly violating the Fair Debt Collection Practices Act.
Troy Scheffler, who has filed at least 18 other lawsuits against collection agencies, according to data compiled by WebRecon, sued Gurstel Chargo, after Gurstel obtained a judgment on an unpaid credit card debt.
To access a copy of the ruling in Scheffler v. Gurstel, please click here.
The defendant mailed two garnishment notices to the plaintiff and his employer. Both notices included a cover letter that said, “If you have any questions, please contact one of our collection representatives at 800-514-0791.”
After receiving the second letter, the plaintiff called the defendant. During the conversation with the agent, the plaintiff said, “OK, so what am I gonna do about that?” The agent broached the idea of a settlement. The plaintiff then said that he had sent the defendant a “cease” letter and suggested that the agent had violated the terms of that letter. The agent subsequently ended the conversation.
The plaintiff then filed a suit against the defendant, alleging violations of Sections 1692c(c) and 1692e(10) of the FDCPA.
Section 1692c(c) covers what to do when an individual notifies a collector that he or she wishes to cease communications with the collector. Section 1692e of the FDCPA covers false or misleading representations, and subsection (10) covers the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.
The defendant was accused of violating 1692c(c) when it sent the garnishment notices with the cover letter and tried to collect the debt during the subsequent phone call and 1692e(10) because the cover letter was a “bait-and-switch under which consumers seeking answers to a legal process are instead subjected to efforts to collect a debt.”
A district court granted summary judgment in favor of the defendant on all claims.
On appeal, the plaintiff argued that the District Court failed to apply the least sophisticated consumer standard because he is a former collector. The Appeals Court didn’t bite.
Scheffler’s argument is contradicted by the express language of the district court’s order. Not only did the district court correctly articulate the unsophisticated consumer standard, it explicitly applied that standard when analyzing both of Scheffler’s statutory claims. Regarding Scheffler’s § 1692c(c) claim, the district court stated that Scheffler’s waiver of his cease letter was “knowing and voluntary, just as it would be were he an unsophisticated debtor.” And in the district court’s analysis regarding Scheffler’s § 1692e claim, the district court rejected Scheffler’s argument that the cover letter was deceptive by stating that the letter “certainly was not deceiving to Scheffler, whose experience in debt collection and FDCPA litigation belies his grievance, but neither would it be deceiving to an unsophisticated consumer.” Considering these statements, we have no reason to believe the district court failed to apply the unsophisticated consumer standard.
The plaintiff then tried to argue that the cover letter of the garnishment notice constituted an FDCPA violation because it included a phone number and a “directive” to call the agency with any questions.
The cover letter was a communication regarding the debt in a general sense, but it still fits within the remedy exception under § 1692c(c)(2), making the communication permissible. We see nothing improper with providing a phone number for Scheffler to contact if he had questions. To the contrary, it would be odd if the letter did not provide contact information.
The Appeals Court also rejected the argument that the conversation was a violation of the plaintiff’s “cease” letter because the plaintiff broached the issue of what to do about the debt when he said, “so what am I gonna do about that?”
We hold Scheffler voluntarily and knowingly waived his cease letter for purposes of allowing [the collection agent] to answer his question, and therefore Gurstel did not violate Scheffler’s rights under § 1692c(c) by briefly discussing a possible resolution of the debt during the phone call.
Finally, the Appeals Court rejected the plaintiff’s claim that the cover letter violated Section 1692e(10) by communicating that a collection agent could answer questions about a garnishment summons.
The letter suggested a collection representative could be reached at the listed number and that proved to be true. As for Scheffler’s belief that the letter accompanying the garnishment summons was part of some novel deceptive scheme to work around the cease directive, this is the exact sort of peculiar interpretation against which debt collectors are protected by the objective element of the unsophisticated consumer standard.