Illinois Federal Court Dismisses FDCPA Claims Focused on "Bounced Check" Language in Collection Letter

Recently, an Illinois federal court denied and dismissed two plaintiffs' Fair Debt Collection Practices Act (FDCPA) claims after the plaintiffs failed to present evidence sufficient to establish materiality.

The plaintiffs in Gonzalez v. Credit Protection Association, LP, 16-cv-08683, and Stockman v. Credit Protection Association, LP, 16-cv-08059 owed unpaid utilities. These debts were referred for collection. The collection letters warned plaintiffs that if they paid with a check that was returned as unpaid (i.e. a bounced check), the debt collector would be authorized to collect the state-allowed service fee and any applicable sales tax, in addition to initiating legal action if the debt remained unpaid. The plaintiffs claimed this language impermissibly threatened legal action and was false, deceptive and misleading because sales tax for a bad check cannot be recovered under Illinois law.

On review, the Court concluded that the language in the collection letter was neither false nor misleading, and did not threaten impermissible legal action. The Court specifically cited to the plaintiffs' deposition testimony that they would not have paid the accounts with a check. The Court further noted that the plaintiffs did not provide any evidence showing that the debt collector's reference to legal action indicated imminent litigation or that any decision had already been made to pursue litigation. On those facts, Plaintiffs' general feelings of stress lacked factual support that was immaterial to an FDCPA violation.

The Court's ruling strengthens the requirement that plaintiffs produce evidence of a material FDCPA claim; evidence that supports a claim from the unsophisticated consumer's viewpoint and not purely conclusory references to being harmed. Plaintiffs have to overcome the hurdle of proving they were truly misled by a debt collector's communication.