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Vol. 70, No. 12, December
1997
News Briefs
Seventh Circuit gives "debt collectors"
a "safe harbor" collection letter
By Thomas S. Hornig & Nancy B. Johnson
Since the 1995 Heintz v. Jenkins decision,1
attorneys who collect consumer debts for clients have had to comply with
the Fair Debt Collection Practices Act (FDCPA),2
or be subject to actual damages, statutory damages (up to $1,000) and actual
attorney fees.3 Due to the ever-changing interpretations
of the FDCPA, complying with the Act can be difficult. However, the Seventh
Circuit recently made our job a little easier.
Collection attorneys wishing to bring
suit prior to the expiration of the 30-day period specified in the Fair
Debt Collection Practices Act now are explicitly allowed to do so in the
Seventh Circuit under Bartlett as long as they follow the form and
substance of the court's "safe harbor" letter. |
In Bartlett v. Heibl4 Chief Judge Posner
clarified the law for our circuit with respect to when a consumer collection
suit may be commenced. The court also provided attorneys with a "safe
harbor" collection letter. In Bartlett attorney Heibl sent the
consumer, Bartlett, a collection letter that stated legal action would be
commenced within one week if the consumer failed to make full payment
or contact the creditor. The letter also contained the debt validation language
required by the FDCPA,5 which included language
to the effect that the consumer could dispute the debt within 30 days.6
The court held that the juxtaposition of the one-week period and the
30-day period in the same letter, without an explanation as to how the two
time periods fit together, was confusing and thus violated the FDCPA.7 In an effort to provide debt collectors with
guidance to avoid this confusion, the court incorporated into its decision
a sample letter on the facts in Bartlett. The court referenced its
letter, stating:
"We commend this redaction as a safe harbor for debt collectors
who want to avoid liability for the kind of suit that Bartlett has brought
and now won. ...We cannot require debt collectors to use 'our' form.
But of course if they depart from it, they do so at their risk. Debt
collectors who want to avoid suits by disgruntled debtors standing on their
statutory rights would be well-advised to stick close to the form that we
have drafted. It will be a safe haven for them, at least in the Seventh
Circuit." (Emphasis added.)
The Bartlett court further clarified that suit may be brought
prior to the expiration of the 30-day period specified in the debt validation
language.
"The debt collector is perfectly free to sue within thirty days;
he just must cease his efforts at collection during the interval between
being asked for verification of the debt and mailing the verification to
the debtor. 15 U.S.C. § 1692(b)."8
Collection attorneys wishing to bring suit prior to the expiration of
the 30-day period specified now are explicitly allowed to do so in this
circuit under Bartlett as long as they follow the form and substance
of the court's "safe harbor" letter.
Thomas S. Hornig and Nancy B. Johnson practice with
Brennan, Steil, Basting & MacDougall S.C., with offices in Janesville,
Madison, Delavan and Monroe.
Endnotes
1115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995).
215 U.S.C. §§ 1692g.
315 U.S.C. §§ 1692k(a).
41997 WL 616675 (7th Cir. 1997).
515 U.S.C §§ 1692(g).
6Bartlett at 1-2.
7Id. at 4.
8Id.
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