Last week in a Fair Debt Collection Practices Act (FDCPA) case, a judge for the federal district court New York ruled that a letter containing a fifteen-day settlement offer did not overshadow the § 1692g mandated thirty-day validation notice. The case is Santora v. Capio Partners, LLC (Case No. 16-cv-02788, U.S.D.C., Eastern District of New York).

A copy of the court’s Memorandum of Decision and Order can be found here


Defendant, Capio Partners, LLC (Capio), a provider of debt collection services, was engaged to collect a debt of $3,190.95 that plaintiff allegedly owed to another party. On or about February 22, 2016, defendant sent plaintiff an initial collection letter (the collection letter).

The letter contained the following: 


We are reasonable people to deal with and we know that times are tough. Are you expecting a tax refund this year? If so, take this opportunity to resolve your accounts with a one-time payment of $1,595.48 which is a 50% discount off of the balance. 

The offer will expire 03/07/2016. 

This settlement offer and the deadline for accepting it do not in any way affect your right to dispute this debt and request validation of this debt during the 30 days following your receipt of this letter as described on the reverse side. If you do not accept this settlement offer, you are not giving up any of your rights regarding this debt. 


On June 1, 2016 plaintiff filed suit, alleging that although the Collection Letter contained the language required under 15 U.S.C. § 1692g, which provides a consumer with notice of her thirty-day period to exercise her validation and verification rights, these rights were overshadowed by a fifteen-day settlement offer included in the collection letter. 

Plaintiff further alleged that the collection letter is deceptive and overshadowing. Plaintiff contended that Capio’s conduct violated numerous sections of the FDCPA, including but not limited to 15 U.S.C. §§ 1692e, 1692e(2), 1692e(5), 1692e(10), 1692f, 1692f(1), and 1692g.

On October 20, 2016, Capio brought a motion for judgment on the pleadings. 

Editor’s Note: A motion for judgment on the pleadings is similar to a motion for summary judgment, but is brought before Discovery occurs and a record of Discovery results is created. A party may bring a motion for judgment on the pleadings on the basis that the pleadings disclose that the are no material issues of fact to be resolved and that a party is entitled to judgment in their favor as a matter of law. It is reviewed under the same standard as a motion to dismiss under Rule 12(b)(6). 

The Court’s Decision 

The decision was rendered by the Honorable LaShann DeArcy Hall, United States District Court Judge. 

Judge Hall first discussed section 1692g of the FDCPA: 

“Section 1692g of the FDCPA provides that a consumer has thirty days to dispute the validity of a debt after receiving written notice. See 15 U.S.C. § 1692g(a)(3). Any collection activities and communication during this thirty-day period “may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.” Id. § 1692g(b).” 

She then discussed the “least sophisticated consumer” standard:

“Although courts are to analyze collection letters from the perspective of the “least sophisticated consumer,” they must also be reasonable in their application of the standard and assume that even the least sophisticated consumer can read a collection letter with some care. Such an approach protects the naïve from abusive practices while also shielding debt collectors from “bizarre or idiosyncratic interpretations of debt collection letters.” 

Judge Hall then discusses the specific language in the collection letter (citations omitted):

“Here, the Collection Letter explicitly states that “[t]his settlement offer and the deadline for accepting it do not in any way affect your right to dispute this debt and request validation of this debt during the 30 days following your receipt of the letter as described on the reverse side.” 

Defendant’s settlement offer did not demand payment, but rather “extended an incentive for [a] debtor[] to pay [her] account.” If Plaintiff chose to reject Defendant’s offer, “at worst, she . . . would be liable for the original amount of the debt.” Id. Additionally, below the settlement offer, the Collection Letter states “SEE REVERSE SIDE FOR IMPORTANT CONSUMER INFORMATION,” and Plaintiff admits that the Collection Letter contained all of the validation rights language required by § 1692g.

Even the least sophisticated consumer would not read the settlement offer and validation language so carelessly or idiosyncratically as to be misled into disregarding her validation rights. Rather, the pleadings and relevant exhibits demonstrate that Plaintiff was fully informed of her validation rights, and nothing on the face of the letter should be deemed contradictory or misleading. Accordingly, Plaintiff’s overshadowing claim is dismissed.” 

Finally, Judge Hall made short work of the other alleged FDCPA claim. 

“In addition to her § 1692g overshadowing claim, Plaintiff alleges that Defendant violated various other provisions of the FDCPA, “including but not limited to” §§ 1692e, 1692e(2), 1692e(5), 1692e(10), 1692f, and 1692f(1). Plaintiff only provides the bald allegation that Defendant violated these sections of the FDCPA without proffering any facts that would allow the Court to reasonably discern what the allegedly violative conduct was. 

Accordingly, the balance of Plaintiff’s FDCPA claims must be dismissed.” 

insideARM Perspective 

This decision is concise and to the point. It is good to see a strong judge put a quick end to a FDCPA case that seemed, at least to this writer, to have been very tenuous from the beginning. 

In her opinion Judge Hall noted that “Courts in this district have repeatedly held that a settlement offer contained in a debt collector’s initial communication with a debtor does not, by itself, overshadow or contradict a validation notice in the same communication.” 

The language in the letter was clean, simple, and easy to understand. 

insideARM contacted Capio Partners for comment on the case. Bob Hodges, President, commented:

"At Capio Partners, we really are about Complaintless CollectionsTM . We do everything we can to work with the consumers we deal with, and while adhering to the myriad of state and federal laws, try offering them a way to resolve their accounts that is beneficial to them and us. In this instance, I’m glad the court acknowledged we did everything we should to help consumers understand their rights when communicating about the debt.'"

In this instance, Capiio did the right thing. Unfortunately, Capio still had to spend time and money defending the case. Such is the current state of affairs for the ARM industry.

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