Business 8th Edition by Marianne Jennings

Exercise 7

Debts, Threats, and FDGPA
Facts
Lisa Trull (plaintiff) owed $68.05 to BMG Music Service. BMG Music Service referred the account to GC Services Limited Partnership (defendant) for collection. GC Services sent the following pieces of correspondence to Ms. Trull.
Your account has now been referred to GC Services and we intend to obtain payment from you.
In the process of writing this memorandum to you, this firm has accessed the computer information on you provided by BMG MUSIC SERVICE, which is now contained in our National Database. Please be advised that this information will be used by GC Services, including my office, to proceed with our formal collection procedures to settle your account with BMG MUSIC SERVICE.
If you do not think this debt is a just one, you may want to obtain advice on this question. Otherwise, we will expect payment promptly to remedy this claim. When remitting your payment, detach and return the upper portion of this notice. A return envelope is enclosed for your convenience.
The debt listed above has been placed with us for collection. (Since you ignored our previous notice, we assume this debt is correct.) We intend to take all appropriate steps to see that you pay it.
Your failure to pay has been listed by BMG MUSIC SERVICE with a National Credit Reporting Bureau as an outstanding delinquency. This delinquent credit report will be maintained and available as part of your personal file by the National Credit Reporting Bureau- This may be used by interested consumer product and service companies, or other creditors in case you should attempt to obtain goods or credit from them.
Pay what you owe and further collection activities on your account will stop. Failure to resolve this delinquent account will result in continued collection activity.
Don't even think about ignoring this notice as you've ignored others in the past requesting you to pay what you owe BMG MUSIC SERVICE.
Buying on credit can be highly convenient. Why run the risk of losing that privilege? You need to take action immediately in order to avoid being labeled as a bad credit risk by BMG MUSIC SERVICE.
Pay your bill and wipe your record clean today!
***IMPORTANT NOTICE***
YOUR ACCOUNT HAS BEEN TRANSFERRED FROM BMG MUSIC SERVICE TO GC SERVICES' AGENCY MASTER DEBTOR FILE- YOUR PAYMENT MUST BE RECEIVED BY GC SERVICES AT THE ADDRESS INDICATED ABOVE IN ORDER TO ENSURE PROPER CREDIT OR ADJUSTMENT TO YOUR ACCOUNT
This is the last effort 1 will be making to settle your account with BMG MUSIC SERVICE.
Your lack of response to date indicates to us that you do not intend to pay for the merchandise you received from BMG MUSIC SERVICE. Your name will be retained as part of our records along with others who? despite their good name and reputation, have shirked their payment responsibility.
Is it not about time you settled this matter, especially in view of the consequences? We are anxious to clear your record as well as ours. Send your payment!
***IMPORTANT NOTICE***
YOUR ACCOUNT HAS BEEN TRANSFERRED FROM BMG MUSIC SERVICE TO GC SERVICES' AGENCY MASTER DEBTOR FILE. YOUR PAYMENT MUST BE RECEIVED BY GC SERVICES AT THE ADDRESS INDICATED ABOVE IN ORDER TO ENSURE PROPER CREDIT OR ADJUSTMENT TO YOUR ACCOUNT
Further, each letter concludes with the following sentence; "NOTICE: see reverse side for important consumer information." The reverse side then provides the following in all capital letters;
"This is an attempt to collect a debt and any information obtained will be used for that purpose. Consumer information:
"Unless you, within thirty (30) days after your receipt of GC Services' initial written notice to you concerning this debt, dispute the validity of the debt, or any portion hereof, the debt will be assumed to be valid by GC Services. If you notify GC Services in writing within the above described thirty (30) day period that the debt, or any portion thereof, is disputed, GCServices will obtain verification of the debt or a copy of a judgment against you and a copy of such verification or judgment will be mailed to you by GC Services upon your written request within the above described thirty (30) day period, GCServices will provide you with the name and address of the original creditor, if different from the current creditor.
"The demands for payment in this letter do not reduce your rights to dispute this debt, or any portion thereof, and\or to request verification within the thirty (30) day period as set forth above"
Ms. Trull brought suit against GC alleging violations of the FDCPA. GC hied a motion to dismiss Ms. Trull's claim.
Judicial Opinion
NORDBERG, District Judge
Plaintiff complains that the correspondence from Defendant violates [the FDCPA].
The Seventh Circuit has identified the "unsophisticated consumer" as "the hypothetical consumer whose reasonable perceptions will be used to determine if collection messages are deceptive or misleading." This standard is designed to protect consumers who are of below-average sophistication or intelligence, uninformed, naive, or trusting, while incorporating an objective element of reasonableness that "shields complying debt collectors from liability for unrealistic or peculiar interpretations of collection letters."
Applying the standard to this case, the Court concludes that an unsophisticated consumer, who has been informed that "This is the last effort I will be making to settle your account with BMG MUSIC SERVICE," reasonably could interpret the statement, "Your name will be retained as part of our records along with others who, despite their good name and reputation, have shirked their payment responsibility," followed by a reference to (1) the need to "settle[ ] this matter, especially in view of the consequences," (2) the statement that "[w]e are anxious to clear your record as well as ours" and (3) the "***IMPORTANT NOTICE***"that "YOUR ACCOUNT HAS BEEN TRANSFERRED TO GC SERVICES' AGENCY MASTER DEBTOR FILE," to imply that GC operates a consumer reporting agency that assembles consumer credit information for the purpose of furnishing consumer reports to third parties.
[In] the present case, GC Services has. implied that, despite the letter being its last effort to settle the debt, Plaintiff's inclusion in GC Sendees' "master debtor file" will have "consequences." The reasonable unsophisticated consumer could construe the furnishing of this master debtor file to third parties to be among those vague consequences and, therefore, the purpose behind the "master debtor file." Thus, Trull has sufficiently stated a claim upon which relief may be granted.
Plaintiff further claims in Count II that Exhibit C (Letter #3) simulates a telegram, thus deceptively overstating and misrepresenting the urgency of the communication, in violation of the Act.
Plaintiff argues in her responsive brief that the letter of June 13,1995 simulates a telegram because it is on yellow paper and headed "STAR High Priority Communication" and because of the layout and type face.
First, unlike a telegram, the letter was sent through the mail. One who lacks the information to appreciate the distinction would be similarly unaware of the expense that attaches to a telegram and, thus, would not interpret the letter with the same urgency as one who believed it was hand delivered. Further, no derivation of the word telegram appears on the letter; rather, a sentence appears below the heading, stating in all capital letters that "This star high priority letter is being sent to you by GC Services," clearly identifying it as a letter. This is a situation where the standard's objective element of reasonableness "shields complying debt collectors from liability for unrealistic or peculiar interpretations of collection letters." Accordingly, that claim is dismissed, with prejudice.
Plaintiff claims that the correspondence violated Section 1692g in two ways: (1) each letter contained a validation notice, diluting the meaning of the warning and confusing the consumer, and (2) the second letter was sent within 30 days of the initial communication, overshadowing and effectively invalidating the validation notice.
Drawing all reasonable inferences in favor of Plaintiff, the Court finds that it appears beyond doubt that she can prove no set of facts in support of the claim arising from repeated validation notices that would entitle her to relief. The validation notice defines the validation period as being "within thirty (30) days after your receipt of GC Sendees' initial written notice to you concerning this debt." It is unreasonable for even the consumer of below-average sophistication or intelligence, who is uninformed, naive, or trusting, to ignore the word "initial," and, the standard protects the compliant debt collector from a peculiar interpretation.
In contrast. Plaintiff states a claim arising from the letter of June 13,1996, because it states "Since you ignored our previous notice, we assume this debt is correct," contradicting notice of the thirty-day period before which the debt will be assumed to be valid. The Court finds that an unsophisticated consumer reasonably could be misled reading that statement within the validation period.
What was the nature of the four pieces of correspondence?