Opinion ID: 4574638
Heading Depth: 2
Heading Rank: 1

Heading: Itemized Breakdown and Zero Balances

Text: Among other things, the FDCPA requires debt collectors to send consumers a written notice disclosing “the amount of … debt” they owe. 15 U.S.C. § 1692g(a)(1). This disclosure must be clear. See Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 319 (7th Cir. 2016) (“If a letter fails to disclose the required information clearly, it violates the Act, without further proof of confusion.”). Here, there is no dispute that the letter disclosed the amount that Degroot owed as of March 11, 2019, the date of CSI’s letter. That said, “a collection letter can be ‘literally true’ and still be misleading … if it ‘leav[es] the door open’ for a ‘false impression.’” Dunbar v. Kohn Law Firm, S.C., 896 F.3d 762, 765 (7th Cir. 2018) (alteration in original) (citations omitted). The pertinent question in this case is thus whether CSI, by providing a breakdown of Degroot’s debt that showed a zero balance for “interest” and “other charges,” violated 15 U.S.C. §§ 1692e and 1692g(a)(1) by implying that interest and other charges would accrue if the debt remained unpaid. See, e.g., Boucher, 880 F.3d at 371 (explaining that where a plaintiff claims that a false or misleading statement goes to the amount of debt, a determination of whether there has been a violation of § 1692e “‘goes hand-in-hand with whether the amount of the debt has been accurately disclosed’ under § 1692g(a)(1)”). A debt collector violates § 1692e by making statements or representations that “would materially mislead or confuse an unsophisticated consumer.” Koehn v. Delta Outsource Grp., Inc., 939 F.3d 863, 864 (7th Cir. 2019) (quoting Boucher, 880 F.3d at 366). While the paradigmatic example of such prohibited behavior is the inclusion of patently false information, we have also held that “a dunning letter is false and misleading 6 No. 20-1089 if it ‘impl[ies] that certain outcomes might befall a delinquent debtor when, legally, those outcomes cannot come to pass.’” Boucher, 880 F.3d at 367 (alteration in original) (quoting Lox v. CDA, Ltd., 689 F.3d 818, 825 (7th Cir. 2012)). With that background, we turn to the itemized breakdown of debt at issue in this case. To determine whether CSI’s letter was false or misleading, we must answer two questions. The first is whether an unsophisticated consumer would even infer from the letter that interest and other charges would accrue on his outstanding balance if he did not settle the debt. If, and only if, we conclude that an unsophisticated consumer would make such an inference, then we move to analyze whether the inference is false or misleading. To answer the question of whether a statement can be interpreted as Degroot claims, we ask whether an unsophisticated consumer could reach that interpretation. See Steffek v. Client Servs., Inc., 948 F.3d 761, 765 (7th Cir. 2020). As we have stated time and again, while the unsophisticated consumer is “uninformed, naïve, or trusting,” we assume the consumer “nonetheless possesses reasonable intelligence, basic knowledge about the financial world, and is wise enough to read collection notices with added care.” Koehn, 939 F.3d at 864 (internal quotation marks and citations omitted). For that reason, our unsophisticated consumer test is objective and “disregards ‘bizarre’ or ‘idiosyncratic’ interpretations of collection letters.” Dunbar, 896 F.3d at 764–65 (citations omitted). CSI, joined by the Consumer Financial Protection Bureau (“CFPB” or “the Bureau”) and ACA International, the Association of Credit and Collection Professionals (“ACA”), as amici curiae, urge us to conclude that Degroot’s alleged underNo. 20-1089 7 standing of its dunning letter is just such a “bizarre” or “idiosyncratic” interpretation. As the CFPB points out, the itemization of a debt is a record of what has already happened. It “discloses the interest or other charges that have been assessed between a date in the past (in this case, the date that the debt was charged-off) and the date of the notice.” For that reason, the Bureau argues, such a breakdown cannot be construed as forward looking and therefore misleading. We agree. The facts in this case bear a striking resemblance to those in Koehn, in which we concluded a similar claim could not proceed. See 939 F.3d at 865. The plaintiff in Koehn alleged that the dunning letter in question was misleading because it used the phrase “current balance” to describe her balance. Id. at 864. She argued “current balance” implied that her balance could grow even though “her account was actually ‘static,’ meaning that additional interest and fees could no longer be added to the balance.” Id. “By falsely implying that the ‘current balance’ might increase, she contend[ed], the debt collector’s choice of wording [would] mislead debtors to give such static debts greater priority than they otherwise would.” Id. Rejecting that argument we explained: Dunning letters can comply with the Fair Debt Collection Practices Act without answering all possible questions about the future. A lawyer’s ability to identify a question that a dunning let- ter does not expressly answer (“Is it possible the balance might increase?”) does not show the let- ter is misleading, even if a speculative guess to answer the question might be wrong. Id. at 865. 8 No. 20-1089 The logic of Koehn applies with equal force here. CSI’s letter merely detailed, correctly, that no interest or other charges had accrued from the date Capital One charged off the debt to March 11, 2019. Indeed, except for the statement regarding the accrual of interest during CSI’s pursuit of the loan, which we address below, CSI’s letter was totally silent as to the future. Thus, any inference Degroot made about the debt accruing interest or other charges in the future was entirely speculative. Degroot’s insistence—apparently accepted by several district courts, see, e.g., Duarte v. Client Servs., Inc., No. 18 C 01227, 2019 WL 1425734 (N.D. Ill. Mar. 29, 2019)—that the inclusion of a zero balance for interest and fees naturally implies he could incur future interest or other charges if he did not settle the debt is unpersuasive. In line with Koehn, Degroot’s mere raising of an open question about future assessment of other charges with a speculative answer does not make the breakdown misleading. Indeed, our own caselaw appears to compel the inclusion of an itemized breakdown. In Fields v. Wilber Law Firm, P.C., 383 F.3d 562 (7th Cir. 2004), we held that a debt collector violated § 1692e by failing to include an itemized breakdown showing how the debt in question had doubled in size due to fees and other charges. See id. at 566 (explaining that when presented with a non-itemized bill, an unsophisticated consumer may incorrectly assume that she has in fact incurred the entire amount of debt in charges). As we explained, the letter “was misleading because it gave a false impression of the character of the debt … thereby impairing [consumers’] ability to knowledgeably assess the validity of the debt.” Id. We then explained that a simple way to avoid such a problem was to “itemize the various charges that comprise the total No. 20-1089 9 amount of debt.” Id. The logic of Fields suggests that a collector will not violate the FDCPA if it accurately reports that the amount of additional other charges or interest is zero, even if it is also permissible—maybe even preferable—for the creditor to fill in those fields with a “not applicable” notation when it is handling a “static” debt. Furthermore, while Degroot’s complaint relies heavily on AllianceOne’s statement that “interest and fees are no longer being added” to support his allegation that he found CSI’s letter confusing and misleading, even that statement did not say that interest and fees could never be added to his account. That interest and fees are no longer being added to one’s account does not guarantee that they never will be, because there is no way—unless the addition is a legal or factual impossibility—to know what may happen in the future. That is why a statement in a dunning letter that relates only to the present reality and is completely silent as to the future generally does not run afoul of the FDCPA. While dunning letters certainly cannot explicitly suggest that certain outcomes may occur when they are impossible, see, e.g., Boucher, 880 F.3d at 367; Lox, 689 F.3d at 825, they need not guarantee the future, see Koehn, 939 F.3d at 865. For that reason, the itemized breakdown here, which makes no comment whatsoever about the future and does not make an explicit suggestion about future outcomes, does not violate the FDCPA.