May is not just a month anymore. It is now a word that debt collectors can use in collection letters when referencing credit reporting, according to the Seventh Circuit Court of Appeals, which upheld a lower court’s ruling in favor of a collection agency that was sued for allegedly violating the Fair Debt Collection Practices Act because it said delinquent debts “may” be reported to a credit bureau.
A copy of the ruling in the case of Johnson v. Enhanced Recovery Company, LLC, can be accessed by clicking here.
The plaintiff received three collection letters from the defendant. Each letter included the disclosure, “This letter serves as notification that your delinquent account may be reported to the national credit bureaus.” The second letter was sent to the plaintiff on April 21, 2016. The letter included three settlement options with a deadline of May 26, 2016. The letter also stated, “Payment of the offered settlement amount will stop collection activity on this matter.”
The defendant reported the unpaid debt to the credit bureaus on April 24, 2016. The plaintiff sued, alleging that violated the FDCPA because she was misled into thinking that if she accepted one of the settlement offers before May 26, the debt would not be reported to the credit bureaus and that using the word “may” implied reporting in the future, not days after the letter was sent.
A District Court judge denied a motion to dismiss and then certified a class before finally granting a motion for summary judgment filed by the defendant. Both sides appealed, with the plaintiff arguing that summary judgment was not appropriate and the defendant arguing that the motion to dismiss should have been granted in the first place.
The Appeals Court denied the defendant’s request to have the motion to dismiss reinstated, but also denied the plaintiff’s request because she failed to produce any new evidence “beyond her own opinion” that the letter was misleading enough to constitute a violation of the FDCPA.
While admitting that the word “may” conveys two different meanings, one of which is misleading, the Appeals Court said there was nothing it could do about the case because the plaintiff did not mention any additional evidence to support her argument.
“But Johnson has failed completely to demonstrate that a significant —indeed any (beyond herself) — fraction of the population would read the April letter as promising to forgo credit bureau reporting if Johnson paid her debt by May 26th,” the Appeals Court wrote. “In order to arrive at the allegedly misleading interpretation Johnson proposes, the reader must first assume the “remit by” date of May 26 listed at the beginning of the letter with two other settlement offers is linked to the statement, appearing much later in the letter, that the debt “may” be reported to credit bureaus. Next, the phrase “may be reported” must be defined solely as a statement of prospective possibilities as opposed to the equally likely usage indicating ability or authority to report the debt. These proposed interpretations must then be combined with the statement in yet another paragraph informing the debtor that payment of the settlement offer “will stop collection activity” (but not restore service with Sprint), to yield the allegedly misleading interpretation that if the debtor pays the first offered settlement by May 26, then ERC will not report the delinquent debt to the national credit bureaus. Because the language in the April letter, standing alone, makes no such promise, Johnson bore the burden of producing evidence beyond her own say so demonstrating the likelihood that an unsophisticated debtor would conclude as much.”