Judge Dismisses FDCPA Case Over Language on Envelope, Use of Offer Safe Harbor

A federal judge in Illinois has dismissed a case alleging a debt collector violated the Fair Debt Collection Practices Act by including language on the exterior of a collection letter envelope and a discount offer in the letter itself.

A copy of the ruling in Preston v. Midland Credit Management can be accessed by clicking here.

The plaintiff received a collection letter from the defendant, which included the language “Time Sensitive Document” on the outside of the envelope. The letter itself offered two discount options for the plaintiff: one offering 40% off the total amount owed if the plaintiff made one single payment by a specified date and the other offering a 20% discount if the plaintiff made six monthly installment payments, with the first payment due by the same specified date. The letter urged the plaintiff to “act now” and included a disclaimer at the bottom that the defendant was “not obligated to renew any offers provided.”

In filing the complaint, the plaintiff alleged the language on the outside of the envelope violated Section 1692f(8) of the FDCPA, which prohibits “using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer …”

The judge, following other courts that have carved out exceptions for language on envelopes deemed to be “benign” and not confusing to the least sophisticated consumer.

“In this case, MCM’s use of the phrase “TIME SENSITIVE DOCUMENT” on the envelope it sent Preston does not create any privacy concerns for Preston or expose potentially embarrassing information by giving away the fact that the letter is from a debt collector,” wrote Judge Sara Ellis of the District Court for the Northern District of Illinois, Eastern Division. “Instead, the language is similar to the phrases ‘priority mail’ and ‘immediate reply requested’ found benign by other courts.”

The plaintiff also tried to allege that the combination of “Time Sensitive Document,” “Act Now,” and “We are not obligated to renew any offers provided,” violated Section 1692e(a)(1) and 1692e(1) which prohibit using false or deceptive means in an attempt to collect on a debt.

However, the use of “We are not obligated to renew this offer,” is actually a safe harbor that was provided by the Seventh Circuit Court of Appeals in Evory v. RJM Acquisitions Funding LLC.

“MCM used this exact wording at the bottom of its letter, offering a discount if Preston responded by a certain date and making clear that it had no obligation to renew the offer, while at the same time indicating that the possibility of renewal existed,” Judge Ellis wrote. “The letter and envelope did not include any threatening language or suggest negative repercussions if Preston did not comply. Thus, having complied with Evory’s safe harbor language, MCM protected itself from a § 1692e claim.”

The plaintiff also tried to say that the language was placed too far away from the settlement offer in the letter, which Judge Ellis also rejected.


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