On November 23, 2016, Judge Carlos Murguia of the U.S. District Court for Kansas ruled that a disclosure required in a collection letter for Massachusetts consumers was misleading to a consumer that was not a Massachusetts resident, since the letter did not contain a notice that the disclosure applied to Massachusetts residents only and the disclosure was formatted differently from other State disclosures.

The case is Ensminger and Lyons v. Fair Collections & Outsourcing, Inc. (Case No. 16-02173, U.S. District Court, District of Kansas, Nov. 23, 2016). The decision can be found here.

Background & Procedural History

Between March 2015 and February 2016, plaintiffs Mark Ensminger and Ty Lyons both received letters from defendant Fair Collections & Outsourcing, Inc. (Fair) regarding alleged debts.

The letters include state-specific disclosures, including the “Massachusetts Disclosure” stating that the recipient has the right to request that telephone calls about the alleged debt not be made to the recipient’s place of employment. The Massachusetts Disclosure appeared as follows:

NOTICE OF IMPORTANT RIGHTS. YOU HAVE THE RIGHT TO MAKE A WRITTEN OR ORAL REQUEST THAT TELEPHONE CALLS REGARDING YOUR DEBT NOT BE MADE TO YOU AT YOUR PLACE OF EMPLOYMENT. ANY SUCH ORAL REQUEST WILL BE VALID FOR ONLY TEN DAYS UNLESS YOU PROVIDE WRITTEN CONFIRMATION OF THE REQUEST POSTMARKED OR DELIVERED WITHIN SEVEN DAYS OF SUCH REQUEST. YOU MAY TERMINATE THIS REQUEST BY WRITING TO THE DEBT COLLECTOR.

Of the state-specific disclosures, only the Massachusetts Disclosure is formatted with bold, uppercase letters and included indentation. The majority of the other disclosures are neither in bold nor uppercase letters. There was also no explicit statement noting that the Massachusetts Disclosure applied only to residents of the state of Massachusetts.

The plaintiffs filed suit against Fair alleging that the company violated the Fair Debt Collection Practices Act (FDCPA) by sending debt collection letters with false, deceptive, and misleading representations about the rights of consumers under the FDCPA. The plaintiffs also filed for class certification, alleging that the defendant sends similarly misleading letters routinely.

The Court’s Memorandum and Order

In their discussion of this case, the District Court noted that the “overwhelming majority of Courts of Appeals” use the “least sophisticated consumer” standard when looking at FDCPA cases like this one, trying to understand “how the least sophisticated consumer would interpret the notice received from the debt collector.”

With respect to this case, the Court comments that “it is plausible that the least sophisticated consumer could be misled to believe that the Massachusetts Disclosure applies to all consumers, not just Massachusetts residents” and is thus plausible as a false or misleading representation.

In discussing different applications of the FDCPA by different courts on similar matters, the District Court for Kansas predicts that the “determination of whether the language in a collection letter is confusing or misleading to the least sophisticated consumer” under the FDCPA “is a question of law,” not a question of fact.

The Court also makes a point to note a recent case against the same defendant, Joslin v. Fair Collections & Outsourcing, Inc. (Case No. 15-00723, U.S. District Court, Western District of Missouri, Feb. 5, 2016), in which the Western District of Missouri previously ruled that the formatting of the Massachusetts Disclosure in the defendant’s letter made it “not entirely unreasonable that an unsophisticated consumer would not realize the Massachusetts Disclosure was applicable only to Massachusetts residents.”

Given all this, the Court holds that “because of the formatting of the Massachusetts Disclosure in defendant’s letters, it is plausible that the least sophisticated consumer could be misled to believe that the Massachusetts Disclosure applies to all consumers, not just Massachusetts residents,” treating the Joslin case “as persuasive authority, but not binding.”

insideARM Perspective

The main issues in this case are 1) an incomplete notice and 2) proper formatting. Neither the plaintiffs nor the courts are disputing the content of the Massachusetts Disclosure as objectionable - in fact, the defendant is legally required to include the disclosure. The first issue is that they failed to tell the consumer that the notice applied only to Massachusetts residents. The issue with the disclosure was further compounded by the fact that it was included in bold, capital letters, when the other state-specific disclosures were included in a regular font, adding a visual significance to the Massachusetts Disclosure that could confuse the average consumer.

If you’re sending letters with state-specific disclosures, make sure that you represent each state’s disclosure in a consistent way and include an explicit statement noting that a state-specific disclosure applies only to the residents of that specific state.


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