Opinion ID: 2680617
Heading Depth: 3
Heading Rank: 1

Heading: Debt Collection Activity

Text: McLaughlin contends that PHS’s Letter “knowingly misrepresented that, as of May 18, 2010, $650 in attorney’s fees and $550 in ‘costs of suit and title search’ were due and owing,” and hence that the Letter violates the FDCPA. Appellant Br. 6. PHS contends that the Letter does not constitute “debt collection activity” subject to the FDCPA because it “made no demand for payment, contained no suggestion that [McLaughlin] settle the underlying debt, nor enter into a payment plan.” Appellee Br. 31 (emphasis omitted). The FDCPA “regulates ‘debt collection’” but does not define the term. Simon v. FIA Card Servs., N.A., 732 F.3d 259, 265 (3d Cir. 2013). The statute’s substantive provisions, however, make clear that it covers conduct “taken in connection with the collection of any debt.” Id. (internal quotation marks and citations omitted). Put differently, activity undertaken for the general purpose of inducing payment constitutes debt collection activity. Id.; see also Gburek v. Litton Loan Servicing LP, 614 F.3d 380, 385 (7th Cir. 2010) (describing “the commonsense inquiry of whether a communication from a debt collector is made in connection with the collection of any debt”). Thus, a communication need not contain an explicit demand for payment to constitute debt collection activity. Simon, 732 F.3d at 266. Indeed, communications that include discussions of the status of payment, offers of alternatives to default, and requests for financial information may be part of a dialogue to facilitate 9 In his notices of appeal, McLaughlin identified both the District Court’s order dismissing his claims under Rule 12(b)(6) and the order denying his motion for reconsideration, but this does not affect the standard of review. McAlister v. Sentry Ins. Co., 958 F.2d 550, 552-53 (3d Cir. 1992) (“Because an appeal from a denial of a Motion for Reconsideration brings up the underlying judgment for review, the standard of review varies with the nature of the underlying judgment.”). 7 satisfaction of the debt and hence can constitute debt collection activity. Id. PHS’s Letter is plainly part of such a dialogue. The Letter states that PHS is a “debt collector attempting to collect a debt” and that information PHS obtains “may be used for that purpose,” namely to collect a debt. App. 73. It then provides an invoice-like presentation of the amount due. The Letter also informs the recipient how to obtain “updated . . . payoff quotes,” meaning how to obtain current information about the amount that would have to be paid to satisfy the debt. Id. It is reasonable to infer that an entity that identifies itself as a debt collector, lays out the amount of the debt, and explains how to obtain current payoff quotes has engaged in a communication related to collecting a debt. Thus, the Letter constitutes debt collection activity under the FDCPA and misrepresentations contained therein may provide a basis for relief.