The Northern District of California has confirmed what the law makes clear: a debt collector may send the initial communication by email (except in New York).
In Greene v. TrueAccord, Case No. 19-cv-06651 (N.D. Cal. May 19, 2020), the Plaintiff claimed the initial email she received and opened violated the Fair Debt Collection Practices Act (FDCPA) and the Electronic Signatures in Global Commerce Act (E-SIGN) because she never consented to receive email from TrueAccord.
As the District Court made clear, consent is not a factor when an initial communication contains the validation notice in the body of the email. Only one week after final submissions on the motion to dismiss the Complaint, the District Court dismissed the case with prejudice also finding TrueAccord’s validation notice met the requirements of the law and TrueAccord’s emails sent during the 30-day validation period did not overshadow the initial demand.
Sending the initial communication and validation notice by email
A debt collector must provide a consumer with a notice about how to dispute an account. The law states the notice must be given either in the initial communication or in writing within 5 days of that first communication. The FDCPA does not state what methods a collector can use to provide the validation notice in the initial communication—it only indicates that a “communication” is conveying information about a debt through any medium. Many debt collectors have hesitated to use email and other modern forms of communications that consumers prefer because these modes are not addressed in the FDCPA.
In this case, Plaintiff argued that TrueAccord violated the FDCPA by sending the validation notice in an initial communication by email without the consumer’s consent. Plaintiff argued that TrueAccord did not follow the E-SIGN Act, which outlines the requirements for obtaining consent to email a consumer documents that must be provided in writing.
However, as the Court recognized, the E-Sign Act applies to notices that must be provided in writing. Under the FDCPA, the validation notice is not required to be provided in writing if it is given in the initial communication. Since TrueAccord provided the validation notice in the body of the initial communication, E-SIGN does not apply. The Court ruled TrueAccord properly delivered the validation notice in the body of the initial email.
“The Court also agreed with the CFPB’s proposal on the fact that the subject line should contain the name of the creditor and one additional piece of information about the debt other than the amount.”
The Court, in finding that an initial communication can be made electronically, pointed to the fact that “a communication” is broadly defined and can be sent across any medium. Additionally, the Court pointed out that despite amending the FDCPA in 2006 Congress has not made any effort to amend the statute to account for newer communication technologies that have developed. The Court also recognized the CFPB’s proposed rulemaking permits a validation notice as part of an initial communication in the body of an email.
The Court explained that when using email to send the initial communication the notice must be reasonably conveyed to the consumer. This requires the notice to appear in the body of the email—not in an attachment where it could be “hidden from the eyes” of the consumer.
The Court also agreed with the CFPB’s proposal on the fact that the subject line should contain the name of the creditor and one additional piece of information about the debt other than the amount. This ensures “the consumer’s attention is focused on the email . . . as many . . . make decisions to read, ignore, or delete emails on the basis of the subject line.”
While TrueAccord’s subject line did not contain this information (it read “This needs your attention”), the Plaintiff received the email and opened it. While the Court noted that the subject line did not convey that the purpose of the email was to collect a debt, the Plaintiff still opened the email with the validation notice in the body. Therefore, Plaintiff had no standing to make an argument that the subject misled her from opening and receiving the notice when she actually opened it.
Use of the term “send” instead of “mailed”
Plaintiff also argued that the validation notice in the body of the email was incorrect and misleading because the statute reads “a copy of such verification . . . will be mailed to the consumer.” Yet, the notice in TrueAccord’s email used the word “send” instead of the word “mailed.”
When evaluating whether or not a collection communication violates the FDCPA, Courts use the “least sophisticated consumer standard.” This standard is designed to protect all consumers in the spirit of the FDCPA, not just the consumer who filed a lawsuit.
In looking at the challenged language under this least sophisticated consumer standard, the Court held that there is no requirement for a validation notice to track the language of the statute verbatim. The Court stated that:
“…the fact that TrueAccord’s notice departed from the statutory language could not plausibly have deceived or misled the least sophisticated consumer reading the notice.”
Instead, the consumer would understand from the use of the word “send” that a copy of the verification could be physically mailed or electronically mailed; as the Court noted, electronic mailing of validation documents is permitted in compliance with the E-SIGN Act.
Subsequent email communications did not overshadow the validation notice
Plaintiff also claimed that multiple demands for payment during the thirty-day validation period violated the FDCPA because these emails overshadowed the initial communication containing the validation notice. The FDCPA protects consumers from collection efforts and communications sent during the thirty-day validation period that overshadow the consumer’s right to dispute. Typically, communications that demand immediate payment or offer deadlines prior to the expiration of the thirty days constitute overshadowing.
In dismissing Plaintiff’s theory, the Court found that the FDCPA does not put any limits on the number of times a debt collector can communicate with a consumer during the validation period. The Court noted that while it is possible that the number and timing of communications sent to a consumer could be relevant in an evaluation of whether the communications overshadow the notice, the number of communications in this case—seven within a 30day period—is not excessive.
The Court also looked at the content of all these emails. The emails clearly conveyed that TrueAccord would like a payment. They did not include:
- Language requiring a payment
- Language suggesting that a payment should be made prior to the expiration of the 30-day validation period
The Court noted there was no real expression of urgency and all emails had a prominent out of statute disclosure stating that, because of the age of the debt, the creditor will not sue Plaintiff or report it to a credit reporting agency. By taking this “non-threatening content” of the communications in consideration with the number of emails sent, the Court did not find it plausible that the least sophisticated consumer could be misled or that the emails overshadowed the validation notice.
What lessons can we learn from this case?
Greene is only the second case ever to evaluate how to properly provide the validation notice by email. It provides good guidance to follow:
- Placing the notice in the body of the email, not behind a password or through a link with seven steps to download (like in LaVallee) and
- Including the name of the creditor and one additional piece of information in the subject line. This step brings the consumer’s attention to the initial email as relating to the debt (this is also forthcoming in the CFPB rule).
Greene is also the first case ever to evaluate the content of email communications sent during the validation period. It provides good guidance to follow regarding appropriate tone, frequency, and payment requests. Of interest, the Court noted that TrueAccord included a “Dispute this Debt” link on all emails. The Court felt that it’s smaller font size and placement at the footer of the emails “buried” the link; but ultimately that fact:
“…did not mean that the original validation notice ha[d] been overshadowed, particularly given the specific facts before the Court.”
Email is a core part of an omnichannel, digital collection strategy, but it doesn’t evolve overnight. It’s important that you have the experience and infrastructure in place to send and deliver emails on a mass scale so that they’re delivered to the consumer’s inbox. Cases like this are shaping the future of digital debt collection practices and how consumers interact with their debts.
Want to learn more about how TrueAccord remains at the forefront of regulatory change? Reach out to our team!