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Appeals Court Rules ‘Time Sensitive Document’ on Envelope Violates FDCPA

The Seventh Circuit Court of Appeals has partially overturned a lower court’s dismissal of a suit in which a collector was accused of violating the Fair Debt Collection Practices Act by including the statement “Time Sensitive Document” on the envelope.

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

The plaintiff received a collection letter from the defendant. On the outside of the envelope, there was a statement that read “Time Sensitive Document.” Inside the envelope, the letter offered two discounted payment options — a 40% discount off the total balance owed if the amount was paid in one lump sum, and a 20% discount off the total balance owed if the amount was paid in six monthly installments. The letter also encouraged the plaintiff to “[a]ct now to maximize … savings and put this debt behind you … .” The letter also noted that the defendant was “… not obligated to renew any offers provided.”

The plaintiff filed suit, alleging the use of “Time Sensitive Document” on the outside of the envelope violated Section 1692f(8) of the FDCPA and that the envelope and the letter — taken together — violated several subsections of Section 1692e of the FDCPA.

A District Court judge granted the defendant’s motion to dismiss on all counts of the complaint. The plaintiff appealed.

In issuing its ruling, the Seventh Circuit decided that Section 1692f(8) of the FDPCA, which states:

Using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.

is pretty straightforward.

In sum, the meaning of § 1692f(8) is clear: When a debt collector communicates with consumers through the mails, it may not use any language or symbol on the envelope except for its business name or address, as long as the name does not indicate that he is in the debt collection business. Turning to the facts here, there is no question that the language “TIME SENSITIVE DOCUMENT” appears on the envelope enclosing a communication to a consumer. It is equally apparent that the language at issue does not fall within the itemized exception set forth in subsection (8): It is not Midland’s name nor its address. The inclusion of this phrase thus violates § 1692f(8), and the district court erred in dismissing the claim set forth in Count I of Mr. Preston’s complaint.

As for the claim that the envelope and the letter violated Section 1692e of the FDCPA, the Appeals Court agreed with the District Court that the letter did not do so and affirmed the dismissal of those counts of the complaint.

The case has been remanded back to the District Court for further proceedings related to the 1692f(8) claim.

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