Neal Preston v. Midland Credit Management

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18‐3119
NEAL PRESTON, individually and on
behalf of a nationwide class of
similarly situated individuals,
Plaintiff‐Appellant,
v.
MIDLAND CREDIT MANAGEMENT, INC.,
Defendant‐Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:18‐cv‐01532 — Sara L. Ellis, Judge.
____________________
ARGUED MAY 29, 2019 — DECIDED JANUARY 21, 2020
____________________
Before RIPPLE, ROVNER, and BARRETT, Circuit Judges.
RIPPLE, Circuit Judge. Neal Preston brought this putative
class action in which he claimed that Midland Credit Man‐
agement, Inc. (“Midland”), had sent him a collection letter
that violated the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692–1692p. Specifically, he
claimed that the words “TIME SENSITIVE DOCUMENT” on
2 No. 18‐3119
the envelope violated § 1692f(8)’s prohibition against
“[u]sing any language or symbol,” other than the defend‐
ant’s business name or address, on the envelope of a debt
collection letter. He also claimed that these words, and other
language employed in the body of the letter, were false and
deceptive, in violation of § 1692e(2) and (10).
On Midland’s motion, the district court dismissed the
complaint. The district court noted that the plain language of
§ 1692f(8) prohibited any writing on the envelope, but never‐
theless concluded that there was a benign‐language excep‐
tion to the statutory language. Because the language “TIME
SENSITIVE DOCUMENT” did not create any privacy con‐
cerns or expose Mr. Preston to embarrassment, the district
court held that it fell within this exception. The district court
found no merit with respect to Mr. Preston’s claims under
§ 1692e.
We now reverse in part and affirm in part. We conclude
that the language of § 1692f(8) is clear, and its application
does not lead to absurd results. To the contrary, the prohibi‐
tion of any writing on an envelope containing a debt collec‐
tion letter represents a rational policy choice by Congress.
Consequently, we conclude that the district court erred in
dismissing Mr. Preston’s claim under § 1692f(8). However,
we agree with the district court that the language on the en‐
velope and in the letter does not violate § 1692e and, there‐
fore, affirm the dismissal of the claims brought under that
section.
No. 18‐3119 3
I.
BACKGROUND
A.
In July 2017, Midland sent Mr. Preston a debt collection
letter. The collection letter was enclosed in an envelope,
1
which bore the words “TIME SENSITIVE DOCUMENT.”
This internal envelope was enclosed in a larger envelope
with a glassine covering so that the words on the internal
envelope were visible to the recipient.
The enclosed letter set forth information about a debt that
Midland sought to collect from Mr. Preston, as well as two
discounted payment options if Mr. Preston submitted pay‐
ment by a certain date. The first offered a discount of forty
percent off the total debt balance if Mr. Preston paid the sum
in a single payment by August 18, 2017. The second offered
a discount of twenty percent off the total debt if Mr. Preston
made six monthly installments, with the first payment due
by August 18, 2017. The letter urged Mr. Preston to “[a]ct
now to maximize … savings and put this debt behind you …
2
.” The letter further stated that the offer expired on August
18, 2017. At the bottom of the letter, just above the payment
1 R.1 ¶ 27 (bold removed). In reviewing the dismissal of Mr. Preston’s
claims, we accept as true all well‐pleaded facts set forth in his complaint
and draw all reasonable inferences in his favor. See, e.g., Anicich v. Home
Depot U.S.A., Inc., 852 F.3d 643, 648 (7th Cir. 2017).
2 Id. ¶ 37.
4 No. 18‐3119
coupon, Midland included the following statement: “We are
3
not obligated to renew any offers provided.”
B.
Following his receipt of the letter, Mr. Preston filed this
action in which he alleged that the language on the enve‐
lope, the language in the letter, and the combination of the
two violated the FDCPA. Specifically, in Count I, he alleged
that the phrase “TIME SENSITIVE DOCUMENT” violated
§ 1692f(8) because it was language other than Midland’s ad‐
dress that appeared on an envelope containing a debt collec‐
tion letter. He also alleged that the envelope itself constitut‐
ed a false representation of the character, amount, or legal
status of a debt, under § 1692e(2)(a), as well a false or decep‐
tive means to collect a debt under § 1692e(10). Count II made
equivalent allegations on behalf of a class of consumers.
Count III alleged that the envelope, together with the lan‐
guage of the discounted offers and the disclaimer that Mid‐
land was not obligated to renew any offers, “create[d] a false
sense of urgency,” which constituted both a “false represen‐
tation of—the character, [and] legal status of any debt” in
violation of § 1692e(2)(a), and a “false representation or de‐
4
ceptive means to collect … a debt” under § 1692e(10). Count
IV made equivalent allegations on behalf of the purported
class. Counts V and VI alleged individual and class claims,
3 Id. ¶ 36.
4 Id. ¶¶ 66, 68 (second alteration in original) (internal quotation marks
omitted). Count III also included an allegation that the envelope and
language violated § 1692f; however, Mr. Preston abandoned that claim in
his response to Midland’s motion to dismiss. See R.23 at 11 n.1.
No. 18‐3119 5
respectively, that the discounted offers, standing alone, vio‐
lated §§ 1692e(2)(a), 1692e(10), and 1692f(8). Finally, Count
VII alleged that Midland’s letter violated the Illinois Con‐
sumer Fairness Act.
Midland moved to dismiss the complaint. It first ob‐
served that the purpose of § 1692f(8), as set forth in the legis‐
lative history, was to prohibit debt collectors from using lan‐
guage or symbols that revealed that the letter concerned
debt collection; it was not intended to “bar the use of harm‐
5
less words or symbols.” It further noted that several courts,
including the Courts of Appeals for the Fifth and Eighth Cir‐
cuits, had adopted a “‘benign language’ exception” to
§ 1692f(8)’s absolute prohibition of the use of any symbol or
6
language on the envelope of the debt collection letter. Be‐
cause “TIME SENSITIVE DOCUMENT” did not suggest that
the contents involved debt collection, Midland argued, this
language fell within such an exception.
Turning to Mr. Preston’s claim that the envelope and
language together created a false sense of urgency, Midland
submitted that the language it had employed fell within the
safe harbor that we created in Evory v. RJM Acquisitions
Funding, L.L.C., 505 F.3d 769 (7th Cir. 2007). According to
Midland, Evory involved “the same legal theory espoused by
[Mr. Preston],” namely that consumers may be convinced
that, if they do not act quickly, there will not be further op‐
5 R.20 at 4 (quoting Lindbergh v. Transworld Sys., Inc., 846 F. Supp. 175,
180 (D. Conn. 1994)).
6 Id. at 4–5.
6 No. 18‐3119
7
portunities to settle their debt. Midland maintained that its
use of the safe‐harbor language—“[w]e are not obligated to
renew any offers provided”—merely informed the consumer
that there may not be other settlement offers, while “dis‐
pel[ling] any false impression by the consumer as to his or
8
her options.”
Finally, Midland contended that there simply was not
any way that a consumer could misconstrue or misunder‐
9
stand the offer language. Consequently, the offer language,
by itself or with the envelope, did not violate any provisions
of the FDCPA.
Mr. Preston opposed the motion. He maintained that the
plain language of § 1692f(8) prohibited the use of any lan‐
guage or symbol on the envelope other than the debt collec‐
tor’s business name or address. Moreover, he contended, the
blanket prohibition set forth in § 1692f(8) achieves rather
than frustrates the statute’s purpose. Specifically, it discour‐
ages debt collectors from “tak[ing] liberties with Section
1692[f](8) by adding so‐called ‘benign language’ to the enve‐
10
lopes of debt coll[ec]tion letters.”
Turning to his claims under § 1692e(2) and (10), Mr. Pres‐
ton submitted that Evory was not controlling. He noted that
the letter in Evory did not contain the words “‘Act Now’” or
7 Id. at 7.
8 Id. at 7–8.
9 See id. at 8 & n.2.
10 R.23 at 7.
No. 18‐3119 7
suggest that the consumer faced “‘TIME SENSITIVE’ pay‐
11
ment options.” Additionally, Mr. Preston argued that Mid‐
land’s placement of the safe‐harbor language “well away”
from the offending language diminished the effect of the
12
safe‐harbor language on the consumer.
The district court agreed with Midland and dismissed the
complaint. It noted that two Courts of Appeals, the Fifth Cir‐
cuit in Goswami v. American Collections Enterprise, Inc., 377
F.3d 488 (5th Cir. 2004), and the Eighth Circuit in Strand v.
Diversified Collection Service, Inc., 380 F.3d 316 (8th Cir. 2004),
“ha[d] accepted … a benign language exception” to
13 14
§ 1692f(8). On the basis of these authorities, the district
15
court was persuaded to reject a literal interpretation. The
court determined that the language “TIME SENSITIVE
DOCUMENT” was indistinguishable from the phrases such
as “priority mail” and “immediate reply requested” that the
16
courts in Goswami and Strand had determined were benign.
11 Id. at 12 (bold removed).
12 Id.
13 R.26 at 4.
14The court also relied upon district court opinions that had followed
Goswami v. American Collections Enterprise, Inc., 377 F.3d 488 (5th Cir.
2004), and Strand v. Diversified Collection Service, Inc., 380 F.3d 316 (8th
Cir. 2004). See R.26 at 4–5.
15 Id. at 4–5.
16 Id. at 5.
8 No. 18‐3119
Turning to Mr. Preston’s claims under § 1692e, the court
concluded that Evory was controlling. The district court ex‐
plained that, like Midland, the debt collector in Evory had
employed language designed to prompt consumers to act
quickly to take advantage of the offers. Although such offers
were not improper, the language could leave the impression
that, if the consumer did not pay by the stated deadline, he
may not have an opportunity to settle his debt. In reality,
however, these offers frequently were renewed. “To address
this,” the district court explained, this court had “created
safe harbor language for debt collectors to use when sending
letters like that [Mr.] Preston received that offer discounts:
17
‘We are not obligated to renew this offer.’” The district
court concluded that Midland had employed such language
in its communication to Mr. Preston and had used it for its
intended purpose: “to protect the unsophisticated consumer
‘against receiving a false impression of his options’ and pro‐
tect the debt collector from claims that its offers are mislead‐
18
ing.” Consequently, the district court held that Midland
was protected by Evory’s safe harbor with respect to
Mr. Preston’s claims under § 1692e.
The district court therefore dismissed Mr. Preston’s
FDCPA claims on the merits. It declined to exercise supple‐
mental jurisdiction over his claims under Illinois state law
and, therefore, dismissed those without prejudice. Following
entry of judgment, Mr. Preston timely appealed.
17Id. at 8 (quoting Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769,
776 (7th Cir. 2007)).
18 Id. (quoting Evory, 505 F.3d at 776).
No. 18‐3119 9
II.
Before this court, Mr. Preston maintains that the district
court erred in dismissing his § 1692f(8) claim based on the
language on the envelope. He also renews his § 1692e claims
based on the envelope, the letter, and the collective language
19
of both. We begin with his § 1692f(8) claim.
A.
As we previously noted, Mr. Preston submits that the
plain language of § 1692f(8) prohibits any language or sym‐
bol, other than the debt collector’s business name or address,
from appearing on the envelope containing a debt collection
letter. We agree.
In construing a statute, “we begin ‘with the language of
the statute.’ If the statutory language is unambiguous and
the ‘statutory scheme is coherent and consistent’ … ‘[t]he in‐
quiry ceases.’” Kingdomware Techs., Inc. v. United States, 136
S. Ct. 1969, 1976 (2016) (quoting Barnhart v. Sigmon Coal Co.,
534 U.S. 438, 450 (2002)). Section 1692f of Title 15 provides:
A debt collector may not use unfair or uncon‐
scionable means to collect or attempt to collect
any debt. Without limiting the general applica‐
tion of the foregoing, the following conduct is a
violation of this section:
19Following oral argument, we determined that, in deciding this appeal,
we would benefit from the views of the Consumer Financial Protection
Bureau (“CFPB”), the agency to whom Congress has delegated rulemak‐
ing authority with respect to the FDCPA. The CFPB filed a brief as ami‐
cus curiae, to which both parties responded. We thank the CFPB for its
submission.
10 No. 18‐3119
(1) The collection of any amount (including
any interest, fee, charge, or expense incidental
to the principal obligation) unless such amount
is expressly authorized by the agreement creat‐
ing the debt or permitted by law.
(2) The acceptance by a debt collector from any
person of a check or other payment instrument
postdated by more than five days unless such
person is notified in writing of the debt collec‐
tor’s intent to deposit such check or instrument
not more than ten nor less than three business
days prior to such deposit.
(3) The solicitation by a debt collector of any
postdated check or other postdated payment
instrument for the purpose of threatening or
instituting criminal prosecution.
(4) Depositing or threatening to deposit any
postdated check or other postdated payment
instrument prior to the date on such check or
instrument.
(5) Causing charges to be made to any person
for communications by concealment of the true
purpose of the communication. Such charges
include, but are not limited to, collect tele‐
phone calls and telegram fees.
(6) Taking or threatening to take any nonjudi‐
cial action to effect dispossession or disable‐
ment of property if—
No. 18‐3119 11
(A) there is no present right to possession of
the property claimed as collateral through
an enforceable security interest;
(B) there is no present intention to take pos‐
session of the property; or
(C) the property is exempt by law from
such dispossession or disablement.
(7) Communicating with a consumer regarding
a debt by post card.
(8) Using any language or symbol, other than
the debt collector’s address, on any envelope
when communicating with a consumer by use
of the mails or by telegram, except that a debt
collector may use his business name if such
name does not indicate that he is in the debt
collection business.
The first sentence of § 1692f prohibits debt collectors from
using unfair or unconscionable means to collect a debt. That
prohibition is then followed by a specific list of conduct that
violates the section. Among those acts specifically listed is
the use of “any language or symbol, other than the debt col‐
lector’s address, on any envelope when communicating with
a consumer … except that a debt collector may use his busi‐
ness name” under prescribed circumstances. 15 U.S.C.
§ 1692f(8). On its face, the prohibition is clear: use of any lan‐
guage or symbol on an envelope, except for the debt collec‐
tor’s name (if it does not indicate that the collector is in the
business of debt collection) and the debt collector’s address,
violates subsection (8).
12 No. 18‐3119
Nevertheless, Midland maintains that a literal application
of § 1692f(8) “would unquestionably lead to bizarre re‐
20
sults.” It urges us to adopt the view of our sister circuits in
Strand and Goswami, to hold that subsection (8) needs clarifi‐
cation, and to look to legislative history to guide our inter‐
pretation of that provision. We turn now to those cases.
In Strand, a debt collector, DCS, had sent a collection let‐
ter in an envelope with the words “PERSONAL AND
CONFIDENTIAL” and “IMMEDIATE REPLY
REQUESTED” printed on it; the envelope “also displayed a
printed corporate logo depicting a grid with an upward‐
pointing arrow and the initials ‘DCS.’” 380 F.3d at 317 (bold
removed). In considering whether this language violated
§ 1692f(8)’s prohibition, the court first observed that a literal
interpretation of statutory language would “create bizarre
results” because, the court believed, “a debtor’s address and
an envelope’s pre‐printed postage would arguably be pro‐
hibited, as would any innocuous mark related to the post,
such as ‘overnight mail’ and ‘forwarding and address cor‐
rection requested.’” Id. at 318.
“With this observation in mind,” the court began its
“analysis by considering whether DCS violated § 1692f(8) by
printing its initials on the suspect envelopes.” Id. The court
noted that it was “not plainly clear [that] the statute prohib‐
its the use of such initials as a corporate name.” Id. It ex‐
plained:
While the statute forbids use of “any language
or symbol,” it makes an exception for the debt
20 Appellee’s Br. 12.
No. 18‐3119 13
collector’s business name, so long as the name
does not reveal the collector’s business. At is‐
sue then is whether the word “name,” as used
in the statute, encompasses references to a cor‐
poration by its initials.
We believe the word, as used modernly in
commerce, can mean not only an appellation in
the traditional sense of the word but also a
more‐abstract signifier, such as initials. In to‐
day’s culture, when memorable brevity is par‐
amount and words and statements are so
commonly reduced to letters and numerals
(e.g., Y2K), initials often have a wider currency
than the names they represent.
Id.
The court in Strand looked primarily to two sources to
guide its interpretation. The first was the FDCPA’s statement
of purpose “to eliminate abusive debt collection practices by
debt collectors [and] to insure that those debt collectors who
refrain from using abusive debt collection practices are not
competitively disadvantaged.” Id. at 318–19 (quoting 15
U.S.C. § 1692(e)). The second was a decision from the Cen‐
tral District of California that had recognized a benign‐
language exception for the words “‘Personal & Confidential’
and ‘Forwarding and Address Correction Requested.’” Id. at
319 (quoting Masuda v. Thomas Richards & Co., 759 F. Supp.
1456, 1466 (C.D. Cal. 1991)). After reviewing these decisions,
the Eighth Circuit concluded that, “[i]n light of such clear
and universal pronouncements on the purpose of the
FDCPA, we believe a reading of the word ‘name’ encom‐
passing initials and logos does not thwart Congressional
14 No. 18‐3119
purpose in any way.” Id. at 319. “By a natural extension,” it
continued, “this construction also renders benign the neutral
logo and innocuous phrases printed on the DCS envelopes.”
Id.
In Goswami, the plaintiff alleged that “a ‘priority letter’
marking on the collection letter envelope” violated
§ 1692f(8). 377 F.3d at 491. In evaluating this claim, the Fifth
Circuit concluded that the prohibition in § 1692f(8) reasona‐
bly could be read in one of two ways: 1) if read in isolation,
it could be read as “barring any markings on the outside of
… [the] envelope other than the names and addresses of the
parties”; and 2) if read together with the prefatory language
of § 1692f, it could be read as “only prohibit[ing] markings
… that are unfair or unconscionable.” Id. at 493. Believing
the statutory language to be ambiguous, the court looked to
the legislative history, the Federal Trade Commission’s
(“FTC”) interpretation of the provision, and district court
cases interpreting the provision, see id. at 494 (collecting cas‐
es), to conclude that a benign‐language exception should
apply. Examining the language at issue, it observed that
“[n]othing about the marking ‘priority letter’ intimates that
the contents of the envelope relate to collection of delinquent
debts.” Id. at 494. Consequently, the language did not violate
§ 1692f(8). Id.
We respectfully disagree with the approach taken by our
sister circuits. Adherence to the plain wording of § 1692f(8)
does not, as Strand suggests, prohibit the use of a debtor’s
address. Nor does the language prohibit pre‐printed postage
or the use of words such as “overnight mail.” The section
plainly sanctions “use of the mails” to communicate with a
debtor and therefore also sanctions the use of the language
No. 18‐3119 15
and symbols required for sending communications through
the mail. It does not prohibit markings required by the Unit‐
ed States Postal Service such as stamping or affixing lan‐
guage or symbols to ensure the successful delivery of the
communication.
We also cannot agree with our sister circuits that the
prefatory language of §1692f renders the provision ambigu‐
ous. The first sentence of §1692f prohibits a debt collector
from “us[ing] unfair or unconscionable means to collect or
attempt to collect any debt.” It next sets forth a nonexhaus‐
tive list of conduct that constitutes “a violation of this sec‐
tion.” Turner v. J.V.D.B. & Assocs., Inc., 330 F.3d 991, 996 (7th
Cir. 2003) (“Section 1692f states, without qualification, that
‘the following conduct is a violation of this section.’”). Each
subsection, (1) through (8), sets forth a discrete means of vio‐
lating the statute, and the elements of each violation are de‐
termined by the language of the subsection. Cf. Turner, 330
F.3d at 996 (stating that “[w]hether the collection of a debt
violates § 1692f(1) depends solely on two factors: (1) whether
the debt agreement explicitly authorizes the charge; or (2)
whether the charge is permitted by law,” both of which ap‐
pear in the text of f(1)). Nothing about the prefatory lan‐
guage of § 1692f renders the meaning of subsection (8) am‐
21
biguous.
21 We also are unpersuaded by the reasoning of the district court cases
on which our sister circuits relied. See Lindbergh, 846 F. Supp. 175; Johnson
v. NCB Collection Servs., 799 F. Supp. 1298 (D. Conn. 1992); Masuda v.
Thomas Richards & Co., 759 F. Supp. 1456 (C.D. Cal. 1991). The court in
both Lindbergh and Johnson followed Masuda in concluding that there is a
benign‐language exception to § 1692f(8). Turning to Masuda, the court
(continued … )
16 No. 18‐3119
Because the statutory language neither leads to absurd
results nor is ambiguous, resort to legislative history is nei‐
22
ther necessary nor appropriate. See, e.g., United States v. Sil‐
( … continued)
considered whether a debt collector had violated § 1692f(8) “by includ‐
ing on the outside of envelopes mailed to Masuda (1) notice that theft of
mail or obstruction of delivery is a federal crime, (2) the language
‘PERSONAL & CONFIDENTIAL’ and (3) the phrase ‘Forwarding and
Address Correction Requested.’” 759 F. Supp. at 1466. The court
acknowledged that the writing appeared to violate the proscription in
§ 1692f(8). It further acknowledged that, “[i]n some cases, a strict inter‐
pretation of the FDCPA may be necessary to protect consumer privacy
and prevent embarrassment to consumers.” Id. (citing S. Rep. No. 95‐382
at 2–4 (1977)). It concluded however that “Congress’ interest in protect‐
ing consumers … would not be promoted by proscribing benign lan‐
guage. Congress enacted § 1692f(8) simply to prevent debt collectors
from ‘using symbols on envelopes indicating that the contents pertain to
debt collection.’” Id. (quoting S. Rep. No. 95‐382 at 8). However, courts
“are bound by the language of the statute as it is written” and “are not at
liberty to rewrite [the] statute because [we] might deem its effects sus‐
ceptible of improvement.” C.I.R. v. Lundy, 516 U.S. 235, 252 (1996) (inter‐
nal quotation marks omitted) (alterations in original). “If the statutory
language is unambiguous, and the statutory scheme is coherent and con‐
sistent,” no further analysis is necessary. Kingdomware Techs., Inc. v. Unit‐
ed States, 136 S. Ct. 1969, 1976 (2016) (internal quotation marks omitted).
The Masuda court never considered, in the first instance, whether the
language of the statute was ambiguous therefore necessitating resort to
legislative history.
22 Resort to agency interpretations similarly is unnecessary when the
statutory language is clear. See, e.g., United States v. Zuniga‐Galeana, 799
F.3d 801, 805 (7th Cir. 2015) (“We defer to an administering agency’s in‐
terpretation of a statute only if the statute is ambiguous.”); Vulcan Const.
Materials, L.P. v. Fed. Mine Safety and Health Review Comm’n, 700 F.3d 297,
312 (7th Cir. 2012) (determining that, because the statute was not ambig‐
uous, the court need not “reach the question of the proper deference
(continued … )
No. 18‐3119 17
va, 140 F.3d 1098, 1102 (7th Cir. 1998) (“If the language is un‐
ambiguous, we need not resort to legislative history or other
sources to glean the legislative intent of the statute.”). The
statutory language does, in fact, prohibit debt collectors
from sending communications to consumers in envelopes
bearing symbols that are indicative of debt collection. The
language of the statute simply draws a clear line to ensure
that consumers’ rights are not lost in the interpretation of
more subtle language. As one court has explained,
[t]his approach provides certainty to debt col‐
lectors and avoids the problem of having to
decide on a case by case basis what language
or symbols intrude into the privacy of the
debtor or otherwise constitute “an unfair or
unconscionable means to collect or attempt to
collect a debt.” [15 U.S.C.] § 1692f. Congress
( … continued)
owed to the Secretary’s interpretation of the statute”). In this case, the
clear language of the statute makes it unnecessary for us to consider the
Federal Trade Commission Staff Commentary on the Fair Debt Collec‐
tion Practices Act, 53 Fed. Reg. 50097 (Dec. 13, 1988), on which Midland
relies to support its argument that we should recognize a benign‐
language exception. Even if we needed agency guidance, however, the
Commentary acknowledges that it is “not a formal … rule or advisory
opinion” and is “not binding on the Commission or the public.” Id. at
50101. Moreover, the CFPB, the agency now charged with administration
and enforcement of the FDCPA, see 15 U.S.C. § 1692l(b)(6), (d); 12 U.S.C.
§ 5512(b)(1), (4), has expressed a contrary view: Based on the plain mean‐
ing of the statute, the use of any language or symbol, other than the debt
collector’s name or address (“if such name does not indicate that he is in
the debt collection business”) violates § 1692f(8). See Amicus Br. (CFPB)
11.
18 No. 18‐3119
wrote into the law a bright‐line rule with re‐
spect to markings on envelopes sent to debtors
and authorized the award of damages to debt‐
ors if debt collectors violate the plain language
of § 1692f(8).
Palmer v. Credit Collection Servs., Inc., 160 F. Supp. 3d 819,
822–23 (E.D. Pa. 2015). In providing certainty, this provision
furthers the FDCPA’s overall purpose of “eliminat[ing] abu‐
sive debt collection practices by debt collectors” and “in‐
sur[ing] that those debt collectors who refrain from using
abusive debt collection practices are not competitively dis‐
advantaged.” 15 U.S.C. § 1692(e).
In sum, the meaning of § 1692f(8) is clear: When a debt
collector communicates with consumers through the mails, it
may not use any language or symbol on the envelope except
for its business name or address, as long as the name does
not indicate that he is in the debt collection business. Turn‐
ing to the facts here, there is no question that the language
“TIME SENSITIVE DOCUMENT” appears on the envelope
enclosing a communication to a consumer. It is equally ap‐
parent that the language at issue does not fall within the
itemized exception set forth in subsection (8): It is not Mid‐
land’s name nor its address. The inclusion of this phrase
thus violates § 1692f(8), and the district court erred in dis‐
missing the claim set forth in Count I of Mr. Preston’s com‐
plaint.
B.
Mr. Preston also maintains that the combination of the
language of the discounted offers, the statement that Mid‐
land was not obligated to renew the offers, and the words
No. 18‐3119 19
“TIME SENSITIVE DOCUMENT” on the envelope, consti‐
tuted both a false representation of the character and legal
23
status of any debt in violation of § 1692e(2)(A) and a “false
representation or deceptive means to collect … a debt” un‐
24
der § 1692e(10). We evaluate § 1692e claims under the un‐
sophisticated consumer standard, see, e.g., Walker v. Nat’l Re‐
covery, Inc., 200 F.3d 500, 501 (7th Cir. 1999), and “ask
whether someone of modest education and limited commer‐
cial savvy would likely be deceived by the letter,” O’Boyle v.
Real Time Resolutions, Inc., 910 F.3d 338, 344 (7th Cir. 2018).
23 15 U.S.C. § 1692e(2)(A) provides:
A debt collector may not use any false, deceptive, or mis‐
leading representation or means in connection with the col‐
lection of any debt. Without limiting the general application
of the foregoing, the following conduct is a violation of this
section:
…
(2) The false representation of—
(A) the character, amount, or legal status of any debt
….
24 15 U.S.C. § 1692e(10) provides:
A debt collector may not use any false, deceptive, or mis‐
leading representation or means in connection with the col‐
lection of any debt. Without limiting the general application
of the foregoing, the following conduct is a violation of this
section:
…
(10) The use of any false representation or deceptive
means to collect or attempt to collect any debt or to ob‐
tain information concerning a consumer.
20 No. 18‐3119
“[I]f it is ‘apparent from a reading of the letter that not even
a significant fraction of the population would be misled by
it,’ then plaintiff fails to state a claim and dismissal is appro‐
priate.” Id. at 342 (quoting Zemeckis v. Glob. Credit & Collec‐
25
tion Corp., 679 F.3d 632, 636 (7th Cir. 2012)).
Mr. Preston’s allegations closely mirror those that we ad‐
dressed in Evory. In that case, the plaintiffs complained that
the following language violated § 1692e:
“[W]e would like to offer you a unique oppor‐
tunity to satisfy your outstanding debt”—“a
settlement of 25% OFF of your current balance.
SO YOU ONLY PAY $[____] In ONE
25 As an initial matter, Mr. Preston maintains that the district court never
should have granted Midland’s motion to dismiss his § 1692e claims be‐
cause Midland’s “Motion to Dismiss only sought to dismiss Plaintiff’s
claim that the Collection Letter Envelope violated Section 1692f(8).” Ap‐
pellant’s Br. 18. Like the district court, we disagree with Mr. Preston’s
characterization of Midland’s motion. Midland clearly requested dismis‐
sal of Mr. Preston’s entire complaint. See R.20 at 8. Additionally, in its
memorandum in support of its motion, Midland included an argument
with the heading “M[idland’s] collection letter and envelope do not cre‐
ate a false sense of urgency[.]” Id. at 6 (bold removed). Although it did
not mention explicitly § 1692e, Midland discussed in detail our decision
in Evory, which created safe‐harbor language that debt collectors may
use to avoid violations of § 1692e. In its memorandum, Midland argued
that Evory disposed of Mr. Preston’s claim that the envelope and letter
together “create[d] a false sense of urgency,” and Midland specifically
referenced allegations that Mr. Preston had made in Count III of his
complaint (seeking relief under § 1692e). R.20 at 7–8. Midland also ad‐
dressed the merits of Mr. Preston’s claims that the language of the dis‐
counted offers standing alone violated § 1692e. See id. at 8 n.2. Conse‐
quently, there is no merit to Mr. Preston’s waiver argument.
No. 18‐3119 21
PAYMENT that must be received no later than
40 days from the date on this letter.” Or
“TIME’S A WASTIN’! ... Act now and receive
30% off ... if you pay by March 31st.” Or we are
“currently able to offer you a substantial dis‐
count of 50% off your Current Balance if we re‐
ceive payment by 05–14–2004 [.]”
Evory, 505 F.3d at 775. In evaluating this language, we noted
that “[t]here is nothing improper about making a settlement
offer.” Id. Nevertheless, because debt collectors “frequently
renew their offers if the consumer fails to accept the initial
offer,” we were concerned that “unsophisticated consumers
may think that if they don’t pay by the deadline, they will
have no further chance to settle their debt for less than the
full amount.” Id. We also noted, however, that requiring
debt collectors to disclose their exact settlement policies
“would disintegrate” the debt collection process. Id. To ac‐
commodate the competing goals of the statute, we fashioned
a safe harbor that would protect the consumer “against re‐
ceiving a false impression of his options” while encouraging
debt collectors to make settlement offers. Id. at 775–76. We
rested on the following language: “We are not obligated to
renew this offer.” Id. at 776. We reasoned that this statement
would inform the unsophisticated consumer “that there
[wa]s a renewal possibility but that it [wa]s not assured.” Id.
Mr. Preston’s communication, like that of the plaintiffs in
Evory, included language—“Act now,” “TIME SENSITIVE
26
DOCUMENT,” and time limits on the settlement offers—
26 R.1 ¶¶ 27, 38 (bold removed).
22 No. 18‐3119
that suggested that the consumer had to settle his debt in the
most expeditious manner possible. However, at the end of
Mr. Preston’s letter, Midland also included safe‐harbor lan‐
guage as in Evory: “We are not obligated to renew any offers
27
provided.” The inclusion of this language cured any
misimpression that an unsophisticated consumer might have
formed concerning the meaning of the settlement offers.
Mr. Preston submits, however, that the language of his
letter is more egregious and, therefore, that Evory’s
safe‐harbor language should not shield Midland from liabil‐
ity under § 1692e. He maintains that the words “TIME
SENSITIVE DOCUMENT” on the envelope of the communi‐
cation, as well as the location of the safe‐harbor language in
the body of the communication, renders Evory’s safe‐harbor
language ineffectual. We cannot accept these contentions. In
Evory, our concern was “that unsophisticated consumers
may think that if they don’t pay by the deadline, they will
have no further chance to settle their debt for less than the
full amount.” 505 F.3d at 775. The words “TIME SENSITVE
DOCUMENT” on Mr. Preston’s envelope simply reiterate
the message in the communication itself, which urges the
debtor to “[a]ct now” and sets forth an expiration date for
the offer. Words of urgency were precisely what was at issue
in Evory and what the safe‐harbor language was meant to
address.
Similarly, the placement of the safe‐harbor language in
Mr. Preston’s communication does not negate its effect.
Mr. Preston relies on Boucher v. Finance System of Green Bay,
27 Id. ¶ 36.
No. 18‐3119 23
Inc., 880 F.3d 362 (7th Cir. 2018), in which we observed that
“a debt collector is only entitled to safe harbor protection if
the information he furnishes is accurate and he does not ob‐
scure it by adding confusing other information (or misin‐
formation).” Id. at 370 (internal quotation marks omitted).
He submits that “the formatting [of] the letter purposefully
pushes the ‘safe harbor’ language to a place on the letter
where its application and contest [sic] is rendered meaning‐
28
less.” In essence, Mr. Preston maintains that the safe harbor
is without effect unless it immediately follows the language
of the offers. We cannot accept this contention. The
safe‐harbor language appears on the face of the letter in the
same font and font size as the offer language. It is not lost in
unnecessary verbiage, but is set apart and centered on a line.
It is not obscured in any way.
Here, Midland accurately and appropriately used the
safe‐harbor language we fashioned in Evory. Consequently,
the district court did not err in dismissing the claim set forth
29
in Counts III and IV of Mr. Preston’s complaint.
28 Appellant’s Br. 21.
29 Following oral argument, Mr. Preston moved for “leave to cite to addi‐
tional collection letters sent to him in response to question posed during
oral argument.” See App. R. 34‐1 (capitalization removed). On its face,
the motion purports to supply three additional letters sent to Mr. Preston
to establish that the discounted offers in fact were renewed. In reality,
Mr. Preston is using what should be a perfunctory motion to provide
more fulsome responses to oral argument questions and to reargue his
case. We therefore deny Mr. Preston’s motion.
We note, however, that, even if we had allowed the submission of
the additional letters, it would not have altered our analysis. In Evory, we
(continued … )
24 No. 18‐3119
C.
Lastly, Mr. Preston contends that Midland violated
§ 1692e because its description of the offers in the communi‐
cation were “meaningless, confusing, misleading and convo‐
30
luted.” Mr. Preston acknowledges that the letter states:
“Act now to maximize your savings and put this debt be‐
31
hind you.” He further acknowledges that the letter identi‐
fies “two discounted payment options, one for 40% off the
32
balance and another at 20% off the balance.” Nevertheless,
he maintains that the letter is confusing because it “does not
explain how being ‘pre‐approved for a discount program’
and making one of the two discounted payment options will
33
impact the remainder of the debt.” Mr. Preston suggests
that the reader is left to wonder whether “the debt [will] be
written off? Will the debt be sold to another debt owner?
( … continued)
observed that debt collectors “frequently renew their offers if the con‐
sumer fails to accept the initial offer,” and we fashioned the safe‐harbor
language so that unsophisticated consumers would not conclude that
“they w[ould] have no further chance to settle their debt for less than the
full amount.” 505 F.3d at 775. Here, the letters merely show that Midland
did renew its offers to Mr. Preston. This is an eventuality anticipated by
Evory and therefore encompassed within its holding.
30 Appellant’s Br. 22.
31 Id.
32 Id. at 21.
33 Id.
No. 18‐3119 25
[Or] [w]ill another debt collector attempt to collect the re‐
34
maining amounts?”
As we have noted, we evaluate § 1692e claims under the
unsophisticated consumer standard. O’Boyle, 910 F.3d at 344.
The unsophisticated consumer “possesses rudimentary
knowledge about the financial world, is wise enough to read
collection notices with added care, possesses ‘reasonable in‐
telligence,’ and is capable of making basic logical deductions
and inferences.” Pettit v. Retrieval Masters Creditor Bureau,
Inc., 211 F.3d 1057, 1060 (7th Cir. 2000). Consequently, in
evaluating § 1692e claims, we “ask ‘whether a person of
modest education and limited commercial savvy would be
likely to be deceived’ by the debt collector’s representation.”
Dunbar v. Kohn Law Firm, S.C., 896 F.3d 762, 764 (7th Cir.
2018) (quoting Evory, 505 F.3d at 774).
Here, we do not share Mr. Preston’s concern that the lan‐
guage of the communication will plague the unsophisticated
consumer with doubt about the effect of the payoff options.
Midland’s letter congratulates the consumer on being “pre‐
approved for a discount program designed to save you
money,” invites the consumer to “[a]ct now to … put this
debt behind you,” gives two discounted payment options,
and indicates that the consumer can save up to $1,235.22 by
35
taking advantage of the offers. Read literally, the meaning
of the letter is clear: If the consumer takes advantage of one
of the discounted payoff options, he will be rid of the debt. A
consumer who interpreted the letter to mean that the debt
34 Id. at 22.
35 R.1 ¶¶ 26, 37; Appellant’s Br. 5.
26 No. 18‐3119
could survive the payoff and be sold to another debt collec‐
tor either would be misreading the words or engaging in a
flight of fancy. Such interpretations do not suffice to state a
claim under § 1692e. See Dunbar, 896 F.3d at 765 (rejecting
the plaintiff’s argument in part because it would have re‐
quired the “unsophisticated consumer” to “understand the
word ‘may’ to mean ‘will’”); Gruber v. Creditors’ Prot. Serv.,
Inc., 742 F.3d 271, 274 (7th Cir. 2014) (noting that the unso‐
phisticated consumer “does not interpret [collection letters]
in a bizarre or idiosyncratic fashion”). Moreover, the letter is
written using common sales language—“discount,” “40%
off,” “20% off”—that consumers regularly encounter. Be‐
cause “it is apparent from a reading of the letter that not
even a significant fraction of the population would be misled
by it,” Zemeckis v. Global Credit & Collection Corp., 679 F.3d
632, 636 (7th Cir. 2012) (internal quotation marks omitted),
the district court properly dismissed Mr. Preston’s § 1692e
claims.
Conclusion
For the foregoing reasons, we affirm the judgment of dis‐
trict court dismissing Mr. Preston’s claims under § 1692e.
However, we reverse the district court’s judgment dismiss‐
ing Mr. Preston’s claim under § 1692f(8) and remand for fur‐
ther proceedings consistent with this opinion. We express no
view on whether the class Mr. Preston seeks to represent
should be certified. Each party will bear its costs in this ap‐
peal.
AFFIRMED in part; REVERSED and REMANDED in part
No. 18‐3119 27
ROVNER, Circuit Judge, concurring. My colleague has
penned a thorough and well‐reasoned opinion in all respects
and has done a great service to this circuit and, one hopes,
others in clarifying that the plain language of the statute
does not contain a benign‐language exemption. I join the
opinion in full. I write separately simply to point out one ar‐
ea in which the clarity from our circuit could be improved
regarding the second issue for our review—the matter of
safe‐harbor language for claims under section 1692e of the
Fair Debt Collection Practices Act, 15 U.S.C. § 1692e.
As section B of the opinion makes clear, in Evory v. RJM
Acquisitions Funding L.L.C., 505 F.3d 769 (7th Cir. 2007), this
court noted the tension between allowing creditors to use
persuasive language to recover debts, and protecting unso‐
phisticated consumers from “false, deceptive or misleading
representations.” See 15 U.S.C. § 1692e(2)(A); Evory, 505 F.3d
at 775‐76. In other words, creditors often use language that
implies that debtors only have a limited time to take ad‐
vantage of a settlement offer, when, in fact, most creditors
continue to renew their offers, and would be pleased to col‐
lect a creditor’s money at any time. As the opinion notes,
“[t]o accommodate the competing goals of the statute, we
fashioned a safe harbor that would protect the consumer
‘against receiving a false impression of his options’ while en‐
couraging debt collectors to make settlement offers.” Ante at
20 (citing Evory, 505 F.3d at 775–76). That safe‐harbor lan‐
guage is as follows: “We are not obligated to renew this of‐
fer.”
I have doubts that this language actually accommodates
the competing goals that the Evory court identified. In fact,
the current safe‐harbor language emphasizes and amplifies
28 No. 18‐3119
the creditor’s message that it is a time‐limited offer. The lan‐
guage is no different from the creditors’ language of “limited
time offer” or a “time sensitive matter,” or “act now,” and
reinforces the idea that if the debtor does not act immediate‐
ly, she may lose the opportunity to do so forever. See Evory,
505 F.3d at 775. (“The concern is that unsophisticated con‐
sumers may think that if they don’t pay by the deadline,
they will have no further chance to settle their debt for less
than the full amount”). As such, I propose that this circuit
reconsider whether the language of the safe‐harbor provi‐
sion announced in Evory realistically honors the goals that
the opinion sought. Adding the following two words to the
language, undoubtedly would do so more accurately: “We
may, but are not obligated to, renew this offer.”
The safe‐harbor language described in the Evory decision,
however, stands. As the opinion notes, Midland Credit used
the language that this circuit sanctioned, and did so appro‐
priately. Consequently, under the current status of our cir‐
cuit’s law, I agree that the district court did not err in dis‐
missing the claims set forth pursuant to section 1692e of the
Act. Preston did not raise the question of the safe‐harbor
language in this case, and therefore this is not the appropri‐
ate time to reconsider it, but should it emerge in a future
case, I urge the court to reexamine whether this safe‐harbor
language achieves the intended balance between the inter‐
ests of creditors and debtors.