A District Court judge in Wisconsin has denied a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act because of a statement included in a collection letter, saying he can not dismiss the suit if it is “at least plausible that a significant fraction of debtors would be misled by the communication.”
A copy of the ruling in the case of Reitz v. Credit Systems of the Fox Valley can be accessed by clicking here.
The defendant sent the plaintiffs a collection letter. The letter included the following statement:
***This account has been listed with our office for COLLECTION*** The ENTIRE BALANCE is due and payable to our office. Avoid errors and protect your CREDIT RECORD.
The plaintiffs filed suit, alleging the statement violated Sections 1692e and 1692f of the FDCPA by making the false threat that if the debt were not paid promptly, the debt would be reported to a credit reporting agency and the individual’s credit score could be affected, even though the defendant “had no intention” of reporting the debt, according to the complaint.
Judge William Gresibach of the District Court for the Eastern District of Wisconsin acknowledged that the defendant was “literally” correct in that the letter did not make an express threat that the debt would be reported. But the implied threat could induce individuals to pay the debt ahead of other debts where the implied threat was not made, the plaintiffs argued, and when applying the least sophisticated consumer standard, Judge Gresibach said he had no choice but to deny the motion to dismiss.
“A claim under § 1692e may be dismissed when it is clear from the face of the communication that no reasonable person, however unsophisticated, would be deceived by the allegedly false or misleading statement,” Judge Greisbach wrote, citing Johnson v. Enhanced Recovery Co., LLC
