The Seventh Circuit Court of Appeals has upheld a lower court’s dismissal of a suit against a collection agency that was accused of violating the Fair Debt Collection Practices Act by referencing a “current balance” in a letter even though the amount owed was static and not going to change.
A copy of the ruling in the case of Koehn v. Delta Outsource Group can be accessed by clicking here.
The plaintiff argued that the phrase “current balance” falsely implied that the amount owed might increase in the future, and violated Section 1692e of the FDCPA by making a misleading representation in connection with the collection of a debt. By making such an implication, the defendant was allegedly tricking the recipient of the letter into giving the debt greater priority because the balance might change if the debt was not paid immediately.
A District Court judge granted the defendant’s motion to dismiss, ruling that the amount owed could change in the future, if the plaintiff made payments on the debt, thus approving the use of the phrase “current balance” in the letter. The plaintiff appealed the ruling, arguing that the phrase would confuse an unsophisticated consumer.
Calling out the plaintiff’s “ingenuity” in her misreading of the letter, the Appeals court made its point by noting that if a collection letter were to say “the balance is $____,” the word “is” implies “current” and could be just as misleading.
“It takes an ingenious misreading of this letter to find it misleading,” the Appeals Court wrote in its ruling. “Dunning letters can comply with the Fair Debt Collection Practices Act without answering all possible questions about the future. A lawyer’s ability to identify a question that a dunning letter does not expressly answer (“Is it possible the balance might increase?”) does not show the letter is misleading, even if a speculative guess to answer the question might be wrong.”