FDCPA Case Analysis

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The decision has the potential to not only expose attorneys to liability merely for filing a legitimate complaint, but to create havoc in the courts in numerous ways.

First, requiring these notices will create confusion for the debtor. The notice will state that the debtor has 30 days to challenge the debt.

However, the summons will state that the debtor has 45 days to file a written answer with the court, 20 days if the action is to enforce a lien or security interest (which will be the case in many actions).

If it is a small claims case, the summons will state that the debtor must appear in court — generally less than 30 days after the date of service — or judgment will be entered against him.

The case of Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997), is instructive in this regard. In Bartlett, an attorney provided a debtor with the required notice, that stated, in part, that the debtor had 30 days to contest the debt. However, the notice also stated that, if the debt was not paid within a week, the attorney would sue.

The Seventh Circuit held that this was confusing to the debtor and violated the FDCPA.

In the case at bar, however, by holding a summons and complaint to be a “communication,” and thus requiring that the sec. 1692a notice be given to a debtor, the Seventh Circuit effectively has mandated that attorneys give debtors confusing information when they file a lawsuit similar to that which the court has found constitutes a violation of the FDCPA.

In the wake of this decision, a debtor who fails to appear in small claims court to contest a collection action against him will have a good argument for reopening the case — that the conflict between the summons and the sec. 1692a notice was confusing.

A debtor who fails to file a timely answer can likewise argue excusable neglect, because the sec. 1692a notice told him he had 30 days, rather than 20, to contest the debt.

Even worse havoc than this can be created by the truly unscrupulous debtor.

Consider this: sec. 1692c(a)(2) prevents any “communication” with a debtor known to be represented by counsel with respect to the debt; and initiating a lawsuit is a “communication.” Logically, if an unscrupulous debtor informs his creditor’s attorney that he is represented by counsel, it becomes a physical impossibility to sue that debtor. See McKnight v. Benitez, 176 F.Supp.2d 1301, 1306-1308 (M.D.Fla.2001).

It should also be noted that the FTC has issued non-binding commentary consistent with Judge Evans’ dissent. 53 FR 50097, 50108.

Finally, the decision creates an anomaly in that only some of the information generally required to be given to debtors need be given, when the initial communication is a summons and complaint.

	Links 7th Circuit Court of Appeals Related Article Under FDCPA, a lawsuit is ‘communication’

Section 1692e(11) provides that formal pleadings need not inform the defendant that the debt collector is attempting to collect a debt and any information provided by the debtor will be used for that purpose.

Ironically, the summons and complaint in the case at bar both informed the debtor of this information. Exempting what is arguably the most important notice that the FDCPA requires, but requiring other notices, is not merely absurd, but a trap for the unwary.

Fortunately, there is one error in the majority opinion that is actually a boon — the court stated that no other circuit court of appeals has previously addressed this issue.
In fact, the Eleventh Circuit has done so, and has held that filing a lawsuit is not a “communication” under the FDCPA. Vega v. McKay, 351 F.3d 1334 (11th Cir.2003). Thus, there is already a conflict within the circuits, providing an extra reason for the U.S. Supreme Court to accept review and re
verse this decision.

– David Ziemer

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David Ziemer can be reached by email.