In a recent decision, a California federal district court ruled that a debt collector’s use of email to send the initial communication containing the validation notice without first obtaining the plaintiff’s consent to receive the notice electronically under the E-SIGN Act did not violate the FDCPA.
The FDCPA requires a debt collector to provide the validation notice in the initial communication or within five days thereafter. In Greene v. TrueAccord Corp., the court agreed with the debt collector that although the FDCPA requires the validation notice to be provided in writing when it is sent after the initial communication, the FDCPA does not prescribe how a validation notice can be provided when it is part of the initial communication. The court observed that “if there are no express restrictions as to how an initial communication can be made—and an oral initial communication is explicitly recognized—then it is a reasonable argument that an initial communication can also be made electronically.” As support for this argument, the court referred to the CFPB’s proposed debt collection rule that would allow a debt collector to satisfy the FDCPA validation notice requirement by providing it by email or text as part of the initial communication. According to the court, it was “reasonable and persuasive” for the CFPB to conclude that E-SIGN consent is not required to send the validation notice by email as part of the initial communication because the debt collector is not required to provide the notice in writing when it is provided with the initial communication.
The district court distinguished the Seventh Circuit’s decision in Lavallee v. Med-1 Solutions, LLC., which held that emails sent by a debt collector to the plaintiff containing hyperlinks to a server on which the plaintiff could access and download the validation notices did not satisfy the FDCPA validation notice requirement. In Lavallee, the Seventh Circuit ruled that, under the specific circumstances of that case only, the contested emails were not “communications” under the FDCPA because they did not “at least imply the existence of a debt” and did not “contain” the validation notice. In Greene, however, the district court observed that the Seventh Circuit had not held that the use of email to send the validation notice as part of the initial communication is not permitted by the FDCPA.
The district court also concluded that the plaintiff had no standing to argue that the validation notice was not effectively conveyed to her because the email subject line stated “This needs your attention.” According to the court, even if the subject line did not convey that the purpose of the email was to collect a debt (which the court seemed to imply might have been the case), the plaintiff had opened and read the email, thereby mooting the issue. The district court further noted that the CFPB’s proposal requires a debt collector that sends the validation notice electronically to identify the purpose of the communication by including the name of the creditor and one additional piece of information about the debt other than the amount in the email subject line or the first line of the text message. In the court’s view, this requirement “ensures that the consumer’s attention is focused on the email or text as many recipients of emails make decisions to read, ignore, or delete emails on the basis of the subject line and recipients of text messages look only at the first line.”
The plaintiff also argued that the debt collector’s use of the term “send” instead of “mailed” in the body of the validation notice violated the FDCPA. The FDCPA provides that the validation notice must include a statement describing when a debt collector must obtain verification of the debt and indicating that “a copy of such verification . . . will be mailed to the consumer by the debt collector.” The debt collector’s validation notice informed the plaintiff when it would obtain verification of the debt and that it would then “send [the plaintiff] a copy of such verification.”
After noting that there is no requirement for a validation notice to track verbatim the FDCPA’s language, the court, applying the “least sophisticated debtor” standard, found the plaintiff’s argument that the debt collector’s use of the word “send” instead of “mailed” was likely to deceive or mislead not to be plausible. In the court’s view, even the least sophisticated debtor would understand from the use of the word “send” that a copy of the verification could be physically or electronically mailed.
Finally, the plaintiff claimed that the debt collector violated the FDCPA by sending seven emails seeking payment during the 30-day validation period. In rejecting the plaintiff’s argument that such emails overshadowed the initial communication containing the validation notice, the court noted that the FDCPA does expressly limit the number of times a debt collector can communicate with a consumer during the validation period. While also noting that the number and timing of communications to a consumer could be a relevant factor in whether those communications overshadow the validation notice, the court did not find it plausible that even the least sophisticated debtor could be misled by the debt collector’s emails. It concluded that seven communications was not excessive, the emails did not contain language requiring a payment, or suggesting that a payment should be made, prior to the expiration of the 30-day validation period, and there was no real expression of urgency in the emails which all contained a prominent disclosure stating that, because of the debt’s age, the creditor would not sue the plaintiff for the debt or report it to a credit reporting agency.