On March 1, 2013, in the case of Caprio v. Healthcare Revenue Recovery Group, LLC, the Third Circuit of the United States Court of Appeals reversed a judgment in a collections case and remanded the case for further proceedings because the use of the words “please call” overshadowed the need for the consumer to dispute the debt in writing.
Healthcare Revenue Recovery Group, LLC (HRRG) was granted a judgment against Ray V. Caprio for debts owed for physician services, but Caprio appealed the judgment on the grounds that the demand letter he received was misleading and violated sections 1692g and 1692e(10) of the Fair Debt Collection Practices Act (FDCPA). Section 1692g of the FDCPA requires that a debt collector provide the following information to the debtor when attempting to collect a debt: the amount of the debt, the name of the creditor to whom the debt is owed, a statement to inform the debtor that if the debt is not disputed within 30 days then the debt is considered valid, a statement to inform the debtor that if the debt is disputed then the office will provide validation of the debt from the original creditor to the debtor, and a statement to inform the debtor that upon written request within thirty days the collector will provide the name of the original creditor if different from the current creditor. Section 1692e (10) requires that “a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
HRRG’s collection letter contained a validation statement, which was located in the last paragraph of the letter on the backside, that complied with the statutory regulations set forth in section 1692g of the FDCPA, but the body of the letter placed emphasis on instructions for the debtor to contact the office by telephone in order to dispute the debt. For dispute of a debt to be legally valid, it must be submitted in writing. While the validation statement informs the debtor that any dispute must be in writing in order to be legally valid, the body of the letter above the validation statement instructs the debtor to call or write to the office in order to dispute the debt. The words “please call” and the office’s telephone number were both printed in bold. The office’s telephone number was also placed at the top of the letter in bold print and in a larger font than the rest of the letter. Unlike the instruction to call into the office, the instructions to write to the office in order to dispute the debt were not emphasized in any way. Caprio’s claim alleged that “the least sophisticated consumer would believe that he should choose either of the instructions as set forth in the [body] of the notice and either call the toll free number or write to HRRG at the address on the letter, to dispute the alleged debt.”
The main question this case brought to the court was whether or not the body of this collection letter overshadowed or contradicted the validation notice and whether that constitutes false, deceptive, or misleading representation. In their analysis, the court looked primarily at two cases, Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991) and Wilson v. Quadramed Corp., 225 F3d 350 (3d Cir. 2000). The Graziano case included a collection letter that “threatened legal action within ten days unless the debt was resolved in that time” in the body of the letter, but still had a validation notice on the back side of the letter that explained that the debtor legally had 30 days to dispute the debt in writing. The court held that there was “a reasonable probability that the least sophisticated debtor, faced with a demand for payment within ten days and a threat of immediate legal action if payment is not made in that time, would be induced to overlook his statutory right to dispute the debt within thirty days.” In the Wilson case, the demand letter included language like “immediate collection” and “we shall afford you the opportunity to pay this bill immediately and avoid further action against you”, but also included the required validation notice in the last paragraph. In Wilson, the court found that this language in the body of the letter did not contradict the validation statement.
In Wilson the court stated that “a validation notice ‘is overshadowing or contradictory if it would make the least sophisticated consumer uncertain as to her rights’” and that “a collection letter ‘is deceptive when it can be reasonably read to have two or more different meanings, one of which is inaccurate.’” Wilson, 225 F3d at 354 (quoting Russell v. Equifax A.R.S., 74 F.3d 30, 35 (2d Cir. 1996)). In Graziano the court stated that “the juxtaposition of two inconsistent statements…rendered the statutory notice invalid under section 1692g [of the FDCPA].” Considering the above mentioned case law coupled with the fact that the words “please call” and the office’s phone number were printed in bold, and in some places in a larger font, while the instructions to write to office were not, the court came to its conclusion that the letter could be misleading to the least sophisticated debtor. Specifically, the court ruled that “the Collection Letter was deceptive because ‘it can reasonably read to have two or more different meanings, one of which is inaccurate,’” as well as that “the Validation Notice was overshadowed and contradicted because the ‘least sophisticated debtor’ would be ‘uncertain as to her rights’” and that “it appears more likely that the ‘least sophisticated debtor’ would take the easier—but legally ineffective—alternative of making a toll-free telephone call to dispute the debt instead of going to the trouble of drafting and then mailing a written dispute.”
The Full Text of the Court Opinion May Be Found At:
Many thanks to Brittany Page for her contributions to this article. Brittany is a paralegal with Slovin & Associates Co., L.P.A.