___________________ 

ADVISORY OPINION 

IN THE MATTER OF 

U.S. FORECLOSURE NETWORK 

FTC File No. P084801 Opinion, March 19, 2008 

Re: Whether the Fair Debt Collection Practices Act 

(“FDCPA”) prohibits a debt collector from notifying a 

consumer of settlement options that may be available to 

avoid foreclosure. 

Dear Ms. Sinsley and Mr. Newburger: 

This is in response to the request from the USFN, formerly 

known as the U.S. Foreclosure Network, for a Commission advisory 

opinion (“Request”) regarding whether the Fair Debt Collection 

Practices Act (“FDCPA”)1

 prohibits a debt collector in the 

foreclosure context from discussing settlement options in the 

collector’s initial or subsequent communications with the consumer. 

The Request asserts that the receipt of information about settlement 

options could enable the consumer to save his or her home from 

foreclosure. As explained more fully below, the Commission 

concludes that debt collectors do not commit a per se violation of the 

FDCPA when they provide such information to consumers. 

Moreover, the Commission believes that it is in the public interest 

for consumers who may be subject to foreclosure to receive truthful, 

non-misleading information about settlement options, especially in 

light of the recent prevalence of mortgage borrowers who are 

delinquent or in foreclosure.2 

1 15 U.S.C. §§ 1692- 1692p. 

2 According to press reports, in 2007, there were an estimated 2.2 million 

foreclosure filings in the United States, a 75% increase from 2006. The number of 

foreclosure filings increased late in 2007- in December there were 215,749 

foreclosure filings, a 97% increase from the number of filings in December 2006. 

December was the fifth consecutive month in which foreclosure filings topped 

200,000. Associated Press, Home Foreclosure Rate Soars in 2007, N.Y.TIMES, 
 

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Opinion of the Commission 

USFN submitted the Request pursuant to Sections 1.1-1.4 of the 

Commission’s Rules of Practice, 16 C.P.R. §§ 1.1-1.4. The Request 

focuses on two sections of the FDCPA, Sections 807 and 809, 15 

U.S.C. §§ 1692e, 1692g,3 and presents three specific questions for 

consideration: 

(1) Does a debt collector violate the FDCPA 

when he, in conjunction with the sending of a 

“validation notice” pursuant to Section 809(a) of the 

FDCPA, notifies a consumer of settlement options 

that may be available to avoid foreclosure? 

(2) Does a debt collector violate the FDCPA 

when he, subsequent to sending the validation notice 

pursuant to Section 809(a) of the FDCPA, notifies a 

consumer of settlement options that might be 

available to avoid foreclosure? 

(3) Does a debt collector commit a false, 

misleading or deceptive act or practice in violation of 

Section 807 of the FDCPA when he presents to a 

consumer settlement options that are available to the 

consumer to avoid foreclosure? 

Jan. 29, 2008, available at www.nytimes.com/aponline/us/AP-Foreclosure 

-Rates.html. Mortgage delinquency is also escalating. The number of borrowers 

falling behind on first-lien mortgage payments for residences during 2007 was the 

highest it has been since 1986-2.64 million borrowers fell behind on payments. 

Michael M. Phillips, Serena Ng & John D. McKinnon, Battle Lines Form Over 

Mortgage Plan, WALL ST. J., Dec. 7, 2007, at Al. 

3

 The Commission has considered only these sections in rendering this 

opinion and it should not be construed to pertain to any other section of the 

FDCPA, to any other law, or to any issue of legal ethics. 
 

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Opinion of the Commission 

The Request states that there is no case law addressing these specific 

questions. We address the questions seriatim. 

USFN’s first two questions specifically reference Section 809(a) 

of the FDCPA, 15 U.S.C. § 1692g(a). Section 809(a) provides, in 

pertinent part, that a debt collector must, within the first five days 

after the initial communication with the debtor, provide a written 

notice containing specific information including the amount of the 

debt, the debtor’s right to dispute the validity of the debt in writing 

within 30 days, and the collector’s obligation to obtain verification 

of the debt in response to the consumer’s dispute document. 

Congress enacted Section 809 to “eliminate the recurring problem of 

debt collectors dunning the wrong person or attempting to collect 

debts which the consumer has already paid.”4 

Section 809(a) does not expressly prohibit debt collectors from 

adding language to the written validation notice with the mandatory 

disclosures. The statute also does not expressly prohibit debt 

collectors from presenting information to consumers about 

settlement options in subsequent communications. The Commission 

therefore concludes that there is no per se violation of Section 

809(a) of the FDCPA if a debt collector includes information 

regarding foreclosure settlement options along with a validation 

notice or in subsequent communications after that notice is 

delivered. 

Nevertheless, collectors must take care that communicating 

information about settlement options does not undermine the 

consumer protections in Section 809(a). The touchstones of Section 

809(a) are the consumer’s rights to dispute his or her debt in writing 

within 30 days and to obtain verification of that debt from the 

collector. To protect these rights, in 2006 Congress amended 

Section 809(b) to expressly state that “[a]ny collection activities and 

4

 S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 

1698. 
 

U.S. 409 FORECLOSURE NETWORK 

Opinion of the Commission 

communication during the 30-day period may not overshadow or be 

inconsistent with the disclosure of the consumer’s right to dispute 

the debt. ...”5

 This statutory amendment ratified court decisions 

holding that debt collectors that provide consumers with information 

in addition to the mandatory disclosures violate Section 809(a) if the 

additional information effectively obscures the consumer’s right to 

dispute his or her debt and obtain verification from the collector.6 

Specifically, these cases concluded that providing additional 

information is unlawful if it overshadows or contradicts required 

disclosures or creates confusion regarding the basic right to dispute 

the debt and obtain verification from the collector.7

 In making these 

determinations, courts considered the communication from the 

perspective of an unsophisticated consumer.8 

In sum, with respect to USFN’s first two questions presented in 

its Request, the Commission concludes that there is no per se 

violation of Section 809(a) if a debt collector in the foreclosure 

context discusses settlement options in the collector’s initial or 

subsequent communications with the consumer. This conclusion, 

however, does not prevent a fact-based finding that a specific 

communication violates the Act if it overshadows or is inconsistent 

with the disclosures of the consumer’s right to dispute the debt 

within 30 days. 

5

 15 U.S.C. § 1692g(b). 

6 See, e.g., Swanson v. Oregon Credit Servs., 869 F.2d 1222 (9th Cir. 1988). 

7 Id.; See, e.g., Durkin v. Equifax Check Servs., 406 F.3d 410 (7th Cir. 2005); 

Shapiro v. Riddle & Assocs., 351 F.3d 63 (2d Cir. 2003); Renick v. Dun & 

Bradstreet Receivable Mgmt. Servs., 290 F.3d 1055 (9th Cir. 2002). 

8 See, e.g., Sims v. G.C. Servs., 445 F.3d 959 (7th Cir. 2006) (“unsophisticated 

consumer”); Smith v. Transworld Sys., 953 F.2d 1025 (6th Cir. 1992) (“least 

sophisticated consumer”). 
 

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Opinion of the Commission 

USFN’s third question asks whether a debt collector commits a 

false, misleading or deceptive act or practice in violation of Section 

807 of the FDCPA when he presents to a consumer settlement 

options that are available to the consumer to avoid foreclosure. 

Section 807·of the FDCPA establishes a general prohibition against 

the use of any “false, deceptive or misleading representation or 

means in connection with the collection of any debt” and provides a 

list of 16 specific practices that are per se false, deceptive or 

misleading under the Act. In enacting Section 807, Congress noted 

that this general prohibition on deceptive collection practices would 

“enable the courts, where appropriate, to proscribe other improper 

conduct which is not specifically addressed.”9 

As a general matter, the Commission concludes that a debt 

collector’s communication with a consumer regarding his or her 

options to resolve mortgage debts and to potentially avoid 

foreclosure would not necessarily violate either the general or 

specific prohibitions of Section 807. However, we also stress that a 

particular communication with settlement option information could 

be deceptive in violation of Section 807 if it contains a false or 

misleading representation or omission of material fact. Determining 

whether a specific communication is false or misleading is a factbased inquiry that considers all the facts and circumstances 

surrounding the particular communication at issue.10 

After reviewing the language of the FDCPA, its legislative 

history, and relevant case law, as well as the information contained 

in the Request, the Commission concludes that a debt collector in 

the foreclosure context does not commit a per se violation of 

9 S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1698. 

10 See Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir. 1985) (noting that 

FDCPA expands pre-existing FTC deception authority); see also FTC Policy 

Statement on Deception, appended to In re Cliffdale Associates, Inc., 103 F.T.C. 

110, 174-84 (1984) (setting forth deception test). 
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Opinion of the Commission 

Sections 807 or 809 of the FDCPA when he or she addresses 

settlement options in the collector's initial or subsequent 

communications with the consumer. 

By direction of the Commission.