Beware of Misleading Debt Collection Documents

15 U.S.C. Section 1692e(9) of 15 U.S.C. prohibits debt collectors from making “false or misleading representations,” including:

The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

Can a Debt Collector Send Me Misleading Documents or a Fake Letter?

Under the Fair Debt Collection Practices Act (FDCPA), a debt collector can’t try to convince consumers to pay by deceiving or misleading them. One part of the law (15 U.S.C. Section 1692e(9)) is intended to prevent debt collectors from sending letters that seem to be coming from the government or the court when in fact they’re just from the debt collection agency.

In Johnson v. Eaton (873 F. Supp. 1019, M.D. La. 1995), a debt collector mailed the plaintiff two documents: a letter and a proposed consent judgment. Both documents were captioned, “Kornmeyer Furniture Co. v. Ruth E. Johnson,” and the consent judgment had a place for the signature of the city court judge. The judge ruled that the letter and consent judgment created the false impression that they were issued by a court. According to the judge, the “least sophisticated consumer” – the standard used to determine whether a debt collector engaged in misleading behavior – would believe the documents were from the court and that they were being sued.

In another case, a debt collector sent a letter that stated the debt collection agency was licensed by the Wisconsin Department of Financial Institutions (DFI) as a sales finance company. The consumer alleged that this was misleading because the debt collector should have been licensed with the Department of Banking as a collection agency. Even if the consumer did an investigation and went to the DFI website, they would learn that the collector was not licensed as a collection agency. Therefore, the consumer would be more likely to assume that the letter was a scam and ignore it. The court agreed that the statement in the letter was false and misleading, and was a violation of the FDCPA.

What Other Kinds of Letters are Misleading?

Courts have ruled that a variety of other types of letters are “false or misleading representations” under this section of the FDCPA, including letters that:

• Use legalistic captions, formats, titles, or phraseology
• Create the false impression that they were approved by the state board that licenses debt collection agencies
• Are sent using an attorney’s letterhead or are signed by a collection agency executive, when that person isn’t actually involved in collecting the debt
• Indicate that a debt collector is a credit bureau
• Are sent by a creditor on a collection agency’s stationery

Can a Debt Collector Ever Send Collection Letters on Government Letterhead?

There are narrow exceptions to the general prohibition on debt collection agencies using government letterhead. For example, in 2016, the U.S. Supreme Court issued a unanimous ruling to that effect in Sheriff v. Gillie (578 U.S. _____ 2016). In that case, a debt collection agency retained as an independent contractor by the Ohio Attorney General sent letters to consumers using the Attorney General’s letterhead. Because Ohio law allows the Attorney General to retain debt collectors as “special counsel,” the court ruled that debt collectors’ use of the letterhead wasn’t false or misleading and therefore didn’t violate Section 1692e(9) of the FDCPA.

Received Misleading Debt Collection Documents? Fight Back!

If you have received debt collection documents that appear to be coming from a court or governmental agency, the collection agency may have violated the law. Lemberg Law can help you fight back. Under the FDCPA, you have the right to sue a debt collection agency in federal court and can recover up to $1,000, along with court costs and attorney fees.

Lemberg Law attorneys protect consumers from abusive debt collection agencies. If you are receiving unwanted collection calls at work, then you could have a case against the collection agency. Contact Lemberg Law at 844-685-9200 ☎ or complete our online form for a no-cost, no-obligation consultation.