The Seventh Circuit Court of Appeals upheld dismissal of a consumer’s claim that the phrase “current balance” in a collection letter obscured the static nature of her debt.
Plaintiff Patricia Ann Koehn alleged that the collection letter from defendant Delta Outsource Group, Inc. falsely implied that Koehn’s static debt was subject to interest and fees in violation of the Fair Debt Collection Practices Act. The sole basis for her claim was the phrase “current balance” which, according to Koehn, would “mislead debtors to give such static debts greater priority than they otherwise would.” The district court dismissed the case, finding that no significant portion of the population would be misled by the “current balance” language in the letter. Koehn appealed.
The Seventh Circuit upheld the district court’s ruling and found the phrase “current balance” was not inherently misleading. In doing so, the Court refused to extend its prior decision in Chuway v. National Action Financial Services, Inc. to Koehn’s case. In Chuway, the Seventh Circuit addressed a letter that instructed the consumer to call in order to obtain the “most current balance information.” Based on this language, the Court concluded that the letter implied the amount due could be different from the “current balance” stated in the letter.
Unlike Chuway, the language in the letter sent to Koehn was “common and innocuous.” The letter did not instruct the consumer to call for a “current balance” and did not contain any other language that could obfuscate the static nature of the debt. As the Court put it in affirming the dismissal of Koehn’s claims, “[i]t takes an ingenuous misreading of this letter to find it misleading. And that same ingenuity would call into question the even simpler phrase that ‘the balance is $___.’ After all, the simple present-tense verb ‘is’ also implies ‘current,’ doesn’t it?”
Plaintiffs’ bar around the country has frequently relied on Chuway in support of their FDCPA claims predicated on the “current balance” language. The Seventh Circuit’s present ruling and clarification of its prior holding in Chuway should help discourage such claims. In the Court’s own words, “[d]unning letters can comply with the FDCPA without answering all possible questions about the future” and “[a] lawyer’s ability to identify a question that a dunning letter does not expressly answer (‘Is it possible the balance might increase?’) does not show the letter is misleading … .”