At what point does language in a collection letter become a threat of litigation and possible violation of the Fair Debt Collection Practices Act. That is a moving target that is changing in courtrooms across the country. A District Court judge in Illinois has denied a defendant’s motion to dismiss after it was sued for violating the FDCPA by making a false threat of litigation in a collection letter even though the defendant argues that the letter essentially asks the individual to pay the outstanding balance, contact his or her attorney, or contact the collection agency.
A copy of the ruling in the case of Soyinka v. Franklin Collection Service, Inc., can be accessed by clicking here.
The plaintiff received a collection letter from the defendant seeking to collect on an unpaid debt. The letter included the following statement:
YOU HAVE AN OUTSTANDING BALANCE OF 171.00 OWED TO AT&T. IN AN EFFORT TO HELP YOU RESOLVE THIS MATTER WE AGREE TO OFFER YOU A SETTLEMENT OF $119.70. TO ACCEPT THIS OFFER PLEASE SEND PAYMENT OF $119.70. IF YOU ARE NOT PAYING THIS ACCOUNT, CONTACT YOUR ATTORNEY REGARDING OUR POTENTIAL REMEDIES, AND YOUR DEFENSES, OR CALL (888) 215-8961.
Even though the letter does not explicitly mention that a lawsuit will be filed against the plaintiff if the debt is not paid, Judge Edmond Chang of the District Court for the Northern District of Illinois, Eastern Division, ruled that using the words “settlement,” “attorney,” “remedies,” and “defenses” would warn a consumer that a lawsuit was coming and that it was “time t lawyer up,” he wrote.
While acknowledging that the terms could be used to describe negotiation without a lawsuit, “an unsophisticated consumer might not be able to figure that out,” Judge Chang noted.
The defendant tried to use rulings in other cases to show that it was not being deceptive or misleading in the letter, but Judge Chang said he “respectfully” disagreed with those decisions.