District Court (Mo.) Says Debt Collector’s Letters Did Not Falsely Threaten Legal Action, Unless They Exceeded Scope of Authority Granted by the Creditor

While Muharemovic points to specific language in the letters purporting to threaten litigation, a reading of the letters in toto shows them to contain no actionable threat. “[L]etters that do not explicitly threaten[ ] that legal action will be taken do not violate the FDCPA.” Id. at 1197 (collecting cases) (internal quotation marks and citations omitted) (emphasis in Adams). Here, Client Services’ letters state that failure to make arrangements for repayment or for settlement would result in the account being sent to an attorney or law firm to review for “possible” or “potential” legal action. “The mere fact that an account might be forwarded to an attorney does not mean that litigation will inevitably follow.” Id. A statement of “possible” or “potential” action is a statement that something is capable of occurring in the future and must be distinguished from a statement that something is certain to occur. McCafferty v. Schwartzkopf Law Office, No. 4:10-CV-1401RWS, 2011 WL 529967, at *5 (E.D. Mo. Feb. 8, 2011). Further, both letters clearly inform Muharemovic that “no decision has been made” to take legal action. By merely informing a consumer that legal action is possible if payment is not remitted, a debt collector does not violate § 1692e(5). Id.; see also Sherry v. Global Credit & Collection Corp., No. 8:10CV406, 2011 WL 13177236, at *3 (D. Neb. Mar. 22, 2011) (letter’s statement that litigation may be brought if matter not resolved and that creditor has not yet decided whether to file suit “is not a threat at all.”). Muharemovic has thus failed to state a claim under § 1692e(5), and that claim will be dismissed.  With respect to the alleged violations of § 1692e(10), Muharemovic contends that Client Services’ representation that Capital One would refer his account for possible legal action was false and deceptive because Client Services does not have authority to speak on behalf of Capital One. Muharemovic further contends that Client Services’ statement about his possible legal defenses was false and misleading given that Client Services would not know in which jurisdiction any potential action would be brought and thus could not speak to the rules applicable to that jurisdiction. While Client Services acknowledges these allegations in its motion to dismiss, it appears to bootstrap them into its argument regarding Muharemovic’s § 1692e(5) claim and does not challenge them specifically. I disagree that these claims are so inextricably related to Muharemovic’s § 1692e(5) claim that they should be dismissed with that claim.  Standing alone, Muharemovic’s allegations sufficiently state a claim of deceptive practice under § 1692e(10). The letters to Muharemovic do not identify the relationship between Capital One and Client Services – only that the account was “placed…for collections.” The extent to which a debt collector may act on a debt and/or represent a creditor’s interest depends upon the nature of the assignment. See Moss v. Barton, No. 4:13-CV-2535 RLW, 2016 WL 1441146, at *4 (E.D. Mo. Apr. 8, 2016). If the debt collector acts outside that authority, as alleged by Muharemovic here, it can be liable under the FDCPA for deceptive practices. Id. In addition, listing limited legal options for the debtor in the event of litigation – i.e., raising “applicable defenses or property exemptions” at a court hearing – could reasonably lead an unsophisticated debtor to believe that those are his only options or that he would be in over his head if he were not to remit payment on the debt. Cf. Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 939 (9th Cir. 2007) (individual debtors do not possess the sophistication and legal wherewithal as attorneys do) (cited in Powers v. Credit Mgmt. Servs., Inc., 776 F.3d 567, 574 (8th Cir. 2015)). I find this to sufficiently state a claim of deceptive means in an attempt to collect a debt. I will therefore not dismiss Muharemovic’s § 1692e(10) claims.