Debt Collector Wins Appeal in Precedential Letter Language Case

The Sixth Circuit Court of Appeals Wednesday upheld a lower court judgment in an FDCPA case against a collection agency over the use of the word “of” rather than “after” in the validation notice in a debt collection letter.

In Wallace v. Diversified Consultants, Inc., Diversified Consultants wrote to Carl Wallace that it would assume the validity of a debt unless he disputed it “within 30 days of receiving this notice.” Seizing on the use of “of” in the letter in contrast to the use of “after” — as outlined in section 1692g(a)(3) of  the Fair Debt Collection Practices Act — Wallace sued Diversified.

Judge Robert H. Cleland, U.S. District Judge in the Eastern District of Michigan, sided with Diversified and granted the company judgment on the pleadings. Wallace appealed to the Sixth Circuit.

In discussing the case in its opinion, the three-judge panel noted that a collector need not parrot the FDCPA to comply with it. “A statement works if it speaks with enough clarity to convey the required information to a reasonable but unsophisticated consumer,” the unanimous panel wrote. “The letter to Wallace did that. It informed him that he had thirty days to dispute the debt, that the clock would start running when he received the letter (rather than, say, when Diversified sent the letter), and that if he did not act the collector would assume the debt’s validity.”

Wallace argued that “of” and “after” are different words, and that they can bear different meanings. The judges agreed, but noted that “this possibility does not make Diversified’s choice of preposition improper. No reasonable consumer, even an unsophisticated one, would read the letter as an instruction to travel back in time (though no more than thirty days back) to dispute the debt.”

The judges also conceded that both “within thirty days of receiving notice” and “within thirty days after receiving notice” are ambiguous about when to start counting. But they said that even if the plaintiff had argued a different point, the result likely would have been the same.

“Does this mean that Wallace would have won had he taken aim, not at the choice of preposition, but at the absence of a clarifying parenthetical—had he argued the letter should have read, ‘within thirty days of receiving this notice (not counting the day of receipt)’? We doubt it. A collector complies with the law so long as it effectively conveys the information specified in the statutory text, and the text says nothing about whether the day of receipt counts.”

The panel affirmed the lower court’s judgment and submitted the opinion for publication.