This is one of those cases where I am going to remind everyone that I am not a lawyer and I could be completely off-base, but as I read this ruling, I thought it offered an interesting lesson that putting the mini-Miranda on every communication might not be the best idea. The Court of Appeals for the Eleventh Circuit has reversed a lower court’s dismissal of a suit alleging violations of the Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act, ruling that mortgage statements that had incorrect information on them should be subject to the FDCPA because they included the mini-Miranda notice that was not required by the Truth in Lending Act.
A copy of the ruling in the case of Daniels v. Select Portfolio Servicing can be accessed by clicking here.
There is a fair amount of background to this case, but to try and make a long story short, the defendant sent a number of monthly mortgage statements to the plaintiff using different formats. The one thing that at least one of the statements had was a disclosure: This is an attempt to collect a debt. All information obtained will be used for that purpose. The other issue was that the statements had the wrong amounts that were owed on them. The plaintiff filed suit, alleging the statements violated the FDCPA and the FCCPA, but a District Court judge granted the defendant’s motion to dismiss, ruling that the statements complied with TILA and thus could not be considered communications in connection with the collection of a debt under the FDCPA or FCCPA.
But, the Eleventh Circuit noted, the statements in question contained language — this is an attempt to collect a debt — that is not required by TILA and the FDCPA only requires consumers be told in the initial written communication that the communication is coming from a debt collector attempting to collect on a debt. “… neither the FDCPA nor the TILA requires the use of such language in subsequent communications or periodic statements,” the Eleventh Circuit wrote. “We hold, consistent with our decisions in Reese and Caceres, that monthly mortgage statements required by the TILA and its regulations can plausibly constitute communications in “connection with the collection of a[ ] debt” under the FDCPA and in connection with “collecting [a] . . . debt” under the FCCPA if (a) they contain “this is an attempt to collect a debt” language, (b) they request or demand payment of a certain amount by a certain date, (c) they provide for a late fee if the payment is not made on time, and (d) the history between the parties suggests that the statement is an attempt to collect on a disputed debt.”
The ruling does include a dissenting opinion from one of the three judges on the panel, saying that “This is an attempt to collect a debt” are not “magic words” and that courts should look at the “substance” of a communication to determine if the FDCPA applies.