Hart v. FCI Lender Services, Inc., 797 F.3d 219

Background

Plaintiff Matthew Hart sued FCI Lender Services under the FDCPA after FCI, which services defaulted loans, sent him a multi-page "Transfer of Servicing" letter when it assumed his delinquent mortgage from GMAC and later sent a payment statement.
The July 2012 letter notified Hart of the servicing transfer, instructed him to send payments (including past due amounts) to FCI, referenced RESPA rights, and included an attachment stating: "THIS IS AN ATTEMPT TO COLLECT UPON A DEBT" and a partially paraphrased §1692g-style dispute notice.
Hart alleged FCI violated §1692g by failing to provide the full required validation notice within five days of an initial communication "in connection with the collection of any debt." He sought statutory damages as a putative class action.
The district court dismissed, holding the transfer/RESPA letter was informational (not a communication in connection with collection) and also found Hart had not adequately alleged a claim based on the later payment statement; it denied leave to amend.
On appeal the Second Circuit reviewed de novo and considered whether an objective standard governs whether a communication is "in connection with the collection of any debt." The court concluded the letter plausibly was an attempt to collect and thus triggered §1692g.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the July 2012 transfer/RESPA letter was an "initial communication... in connection with the collection of any debt" under §1692g	The letter, which directed payments, warned the debt would be "assumed to be valid" after 30 days, and included language that it was an attempt to collect, could reasonably be read by a consumer as a collection communication	The letter was merely a RESPA-mandated transfer notice that conveyed information, did not demand payment or state amounts, and therefore did not trigger FDCPA notice obligations	The court held, applying an objective standard, that Hart plausibly alleged the letter was in connection with collection and thus §1692g was triggered; reversal of dismissal
Whether the later Payment Statement independently triggered §1692g	Hart alternatively argued the payment statement showed collection and warranted notice	FCI argued Hart failed to plead adequately that the statement served as the triggering initial communication	The court did not decide because the letter sufficed to trigger §1692g
Proper standard to determine "in connection with the collection of any debt"	N/A (party positions debated inducement vs broader relation test)	FCI urged an "inducement" requirement; Hart urged a broader "related to" test	Court adopted an objective test focused on how a reasonable consumer would interpret the communication; an attempt to collect plainly qualifies
Whether district court abused discretion denying leave to amend to add allegations about the Payment Statement	Hart sought leave to amend if the letter were not deemed a collection communication	FCI defended enforcement of court scheduling deadlines and denial as within discretion	Court declined to address abuse-of-discretion claim because reversal on the letter claim made amendment issue unnecessary

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (recognizing the plausibility standard for pleadings)
Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85 (FDCPA private right of action and legislative purpose to stop abusive collection)
Vincent v. The Money Store, 736 F.3d 88 (FDCPA remedial purpose and liberal construction)
Gburek v. Litton Loan Servicing LP, 614 F.3d 380 (communication must aim to induce payment to trigger FDCPA under Seventh Circuit standard)
Grden v. Leikin Ingber & Winters PC, 643 F.3d 169 (Sixth Circuit requiring an animating purpose to induce payment for §1692g application)
Simon v. FIA Card Servs., N.A., 732 F.3d 259 (absence of explicit demand does not remove a letter from FDCPA coverage)
Caceres v. McCalla Raymer, LLC, 755 F.3d 1299 (letter held to be an attempt to collect and thus a communication in connection with collection)
Romea v. Heiberger & Assocs., 163 F.3d 111 (communication that aims in part to induce payment constitutes a §1692g communication)