Source: http://updates.mwbllp.com/2014/09/fyi-1st-cir-adopts-unsophisticated.html
Timestamp: 2019-04-26 13:58:03+00:00

Document:
The U.S. Court of Appeals for the First Circuit recently affirmed a judgment against a debt collector for violation of the federal Fair Debt Collection Practices Act (“FDCPA”) where the debt collector’s debt validation or “1692g” notice included an implied threat of imminent litigation, which the Court held overshadowed the consumer’s right to dispute the debt.
A copy of the opinion is available at: http://media.ca1.uscourts.gov/pdf.opinions/13-2478P-01A.pdf.
Following her receipt of this collection letter, Consumer contacted Law Firm to dispute ownership of the debt and request validation. Approximately one month after the collection letter arrived, Consumer sued for alleged violations of the FDCPA.
As you may recall, a debt collector must inform the consumer that s/he has thirty days from receipt of the debt validation notice within which to dispute the debt, and that if the consumer disputes the debt, the debt collector must provide the consumer with verification of the debt. See 15 U.S.C. § 1692g(a)(3)-(4). If the consumer either disputes the debt or requests information concerning the identity of the original creditor within this thirty-day period, the debt collector must suspend collection efforts until it supplies such data. See Id. § 1692g(b).
The Financial Services Regulatory Relief Act of 2006 amended the FDCPA to include that “[a]ny collection activities and communication during the 30-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.” See Pub. L. No. 109-351, § 802(c), 120 Stat. 1966, 2006-07 (codified at 15 U.S.C. § 1692g(b)).
F.3d 1428, 1431-32 (9th Cir. 1997); Russell v. Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996); cf. Chiang v. Verizon New Eng. Inc., 595 F.3d 26, 42 (1st Cir. 2010) (referencing, though having no occasion to adopt or apply, the least sophisticated consumer standard).
However, the First Circuit stated that was adopting the “unsophisticated consumer” formulation “to avoid any appearance of wedding the standard to the ‘very last rung on the sophistication ladder.’" The Court noted that two other circuits -- the Seventh and Eighth -- concluded that a collection letter is to be viewed from the perspective of the hypothetical unsophisticated consumer. See Peters v. Gen. Serv. Bureau, Inc., 277 F.3d 1051, 1055 (8th Cir. 2002); Gammon v. GC Servs. Ltd. P'ship, 27 F.3d 1254, 1257 (7th Cir. 1994).
Finally, Law Firm argued that “the fact that this collection letter was sent by an attorney is irrelevant.” However, the First Circuit stated that it shared the view of the Third Circuit that “[u]nder the [FDCPA], attorney debt collectors warrant closer scrutiny because their abusive collection practices are more egregious than those of lay collectors,” citing Campuzano-Burgos v. Midland Credit Mgmt., Inc., 550 F.3d 294, 301 (3d Cir. 2008). Thus, “[a]n unsophisticated consumer, getting a letter from an attorney, knows the price of poker has just gone up,” citing Avila v. Rubin, 84 F.3d 222, 229 (7th Cir. 1996).
Accordingly, the First Circuit affirmed the lower court’s judgment against the debt collection law firm.

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