Machnik v. RSI Enterprises Inc
2:17-cv-00864
E.D. Wis.Sep 29, 2017Background
- RSI Enterprises, a debt collector, sent Machnik a letter listing a $134.15 charge for service dated 9/26/2012 and stating a “Total 1244.93” for outstanding accounts assigned to RSI.
- The letter included a multi-line breakdown with 15 entries and a remittance form that listed “Total Amount Owing: $1244.93” and referenced 9/26/2012.
- Machnik sued under the Fair Debt Collection Practices Act (FDCPA), alleging the letter was false, deceptive, or misleading under 15 U.S.C. § 1692e and related provisions because it was unclear whether he was being asked to pay $134.15 or $1,244.93.
- RSI moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing the letter is not plausibly confusing and plainly seeks collection of both the listed service balance and the total balance for the creditor.
- The magistrate judge considered the standard for the “unsophisticated consumer” and FDCPA confusion claims, noting caution in deciding such factual, perception-based questions on a motion to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the letter used false, deceptive, or misleading representations in violation of 15 U.S.C. § 1692e | Machnik: the letter is ambiguous—unclear if required payment is $134.15 (service balance) or $1,244.93 (total owing) | RSI: letter is not confusing; it plainly identifies the service balance and also the total amount owing for other accounts | Denied dismissal. Court held Machnik plausibly alleged an FDCPA §1692e violation because an unsophisticated consumer could be misled by the ambiguity |
Key Cases Cited
- McKinney v. Cadleway Props., Inc., 548 F.3d 496 (7th Cir. 2008) (uses unsophisticated-consumer standard to evaluate FDCPA confusion)
- McMillan v. Collection Professionals, Inc., 455 F.3d 754 (7th Cir. 2006) (caution against deciding FDCPA confusion on motion to dismiss; factual inquiry)
- Marquez v. Weinstein, Pinson & Riley, P.S., 836 F.3d 808 (7th Cir. 2016) (confusion under FDCPA is a fact-bound inquiry; dismissal appropriate only if no plausible claim)
- Bravo v. Midland Credit Mgmt., 812 F.3d 599 (7th Cir. 2016) (applying unsophisticated-consumer standard)
- Sims v. GC Servs. L.P., 445 F.3d 959 (7th Cir. 2006) (letter language that increases confusion can violate FDCPA)