Addressing claims based on parsing language in a collection letter, the Eighth Circuit Court of Appeals affirmed dismissal under Rule 12’s plausibility standard of claims asserted under the Fair Debt Collection Practices Act, finding the alleged representations were not misleading as a matter of law.
In Klein v. Credico Inc., the debtor alleged that Credico Inc. d/b/a Credit Collections Bureau violated Section 1692e of the FDCPA by making alleged misrepresentations in a debt collection letter regarding its identity and right to collect pre-judgment interest. In particular, the debtor alleged that referring to Credico as a “Professional Debt Collector” and the acronym “CCB” was misleading under Section 1692e(14) to the least sophisticated consumer. The debtor also claimed that a non-debt collector’s signature on the letter was misleading and that Credico cited the wrong state statute allowing for the collection of prejudgment interest.
Credico moved to dismiss the debtor’s claims entirely, which the United States District Court for the District of Minnesota (St. Paul Division) granted, dismissing the case with prejudice. The debtor appealed.
The Eighth Circuit affirmed the District Court’s holding, finding: (1) an unsophisticated consumer would understand that “Professional Debt Collector” and “CCB” describe and reference Credico; (2) a non-debt collector’s signature on a letter (in addition to the signatures of two registered debt collectors) was not unfair or unconscionable because Credico could legally collect the debt at issue; and (3) Credico was permitted to collect pre-judgment interest under Minnesota law, thus it was not misleading for Credico to state that it could collect pre-judgment interest.
The Eighth Circuit emphasized that the FDCPA’s least sophisticated consumer test “contains an ‘objective element of reasonableness’ that ‘prevents liability for bizarre or idiosyncratic interpretations of collection notices.’” Thus, the Eighth Circuit held that the District Court’s ruling “was based on the correct objective determination that an unsophisticated consumer would not have viewed Credico’s statement as false, deceptive, or misleading.”