On August 8, 2019, in Lavallee v. Med-1 Solutions, LLC, No. 17-3244 (7th Cir. 2019), the Seventh Circuit Court of Appeals rejected a debt collector’s argument that its email, which contained only a “secure message” hyperlink, was a “communication” under the Fair Debt Collection Practices Act (FDCPA) because the email did not convey any information about the debt. The Court also found that the email did not adequately convey the required § 1692g disclosures because the debtor had to follow a series of links to access the notice located on the debt collector’s webpage.
This action arose out of a November 2015 telephone conversation between Beth Lavallee and Med-1 Solutions, LLC, regarding two medical debts referred to Med-1 for collection. Lavallee believed this telephone conversation was the “initial communication” with this debt collector. She filed a lawsuit contending Med-1 failed to provide Lavallee with certain statutorily required disclosures, including the § 1692g validation notice, during or within five days after the telephone conversation.
In discovery, Med-1 produced evidence it had emailed Lavallee regarding her two debts several months prior to the November 2015 telephone conversation. The emails contained a “secure message” hyperlink, directing Lavallee to a Med-1 vendor’s web server, which she could use to access information about her debt, including the § 1692g disclosures. Importantly, Lavallee, who denied receiving the emails, would have had to navigate through several links or buttons and download a .pdf document to gain access to the information and disclosures.
Med-1 argued these emails constituted the “initial communication” between the parties, so it was not required to provide Lavallee with the § 1692g disclosures following the November 2015 telephone conversation. Med-1 also claimed it provided the § 1692g disclosures in the emails because Lavallee had access to this information via the “secure message” hyperlink. On cross-motions for summary judgment, the Southern District of Indiana found the emails were ineffective methods of transmitting the § 1692g disclosures because there was no evidence Lavallee accessed the disclosures and the requirement that a debtor click a hyperlink to access the disclosures made receipt of the notices unlikely. Med-1 appealed the decision.
Before turning to the “email as a communication” issue, the Seventh Circuit analyzed Lavallee’s Article III standing to bring the lawsuit. The Court recognized it recently found a debtor lacked standing to bring a claim based on an alleged violation of § 1692g(a) in Casillas v. Madison Ave. Assocs., Inc., 926 F.3d 329, 333 (7th Cir. 2019). In Casillas, the debtor received an incomplete validation notice that failed to disclose that the debtor could only dispute the debt in writing. The Seventh Circuit found the debtor lacked standing because “‘there was no prospect that [Casillas] would have tried to exercise’ her statutory rights.” Because the debtor “never explained how [the] omission ‘harmed or posed any real risk of harm to her interests under the Act[,]'” the Seventh Court concluded the debtor’s suit was based on a “bare procedural violation” and therefore lacked standing.
The Court found Casillas factually distinguishable from the circumstances involving Lavallee. Unlike in Casillas, where the disclosure was provided but lacked the “proper procedure” for the debtor to exercise her dispute rights, Med-1 failed to provide Lavallee with the disclosure at all (following the November 2015 telephone call or in the emails). The Court found this lack of information especially material to Lavallee because Med-1 was actively collecting on the account when the emails were sent while providing the required disclosures could have delayed the collection actions until Med-1 obtained the proper verification. The Court found these facts provided sufficient “concreteness” to Lavallee’s alleged injury to provide her standing.
An Email Containing A “Secure Message” Is Not a “Communication” Under the FDCPA
Med-1 conceded it did not provide the necessary § 1692g disclosures during, or following, the November 2015 telephone call with Lavallee. However, Med-1 argued it was not required to do so because the call was not the “initial communication” between the parties; instead, the previously sent emails were the initial communications. Thus, the two main issues before the Court on appeal were: (1) did Med-1’s emails constitute “initial communications” under the FDCPA; and (2) if so, did the emails sufficiently apprise Lavallee of her § 1692g rights? The Court answered both queries in the negative.
With respect to the first issue, the Court reasoned that Med-1’s failure to include any information about Lavallee’s debts in the body of the emails precluded a finding that the emails were “communications” under the FDCPA. To qualify as a “communication” under the FDCPA, an oral or written message must “convey . . . information regarding a debt.” In other words, a message must “inform its reader that it . . . pertains to a debt.” The Court found Med-1’s emails, which only contained Med-1’s email address, name, and the “secure message” hyperlink, did not suggest the emails were about a debt or even that they were from a debt collector.
Even if the Emails Were Communications, Med-1 Still Violated § 1692g
The Court also found the emails deficient under § 1692g because the disclosures were not contained within the body of the emails. Indeed, Lavallee would have had to navigate through several additional steps after clicking the “secure message” hyperlink to access the requisite disclosures. As the Court stated, “we’ve already rejected the argument that a communication ‘contains’ the mandated disclosures when it merely provides a means to access them.” See Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C., 214 F.3d 872, 875 (7th Cir. 2000). Med-1 argued its emails were analogous to an envelope that enclosed a letter containing the § 1692g disclosures. The Court rejected this argument; instead finding Med-1’s emails were more like “a letter that provides nothing more than the address of a location where the message can be obtained.”
The Seventh Circuit’s reasoning is consistent with the Consumer Financial Protection Bureau’s released Proposed Rule on Debt Collection. As we previously reported, the CFPB has signaled it is open to allowing debt collectors to provide important disclosures via electronic means, including email. However, the Rule requires that a validation notice, if provided by email, must be included in the body of the email.