Vangorden v. Second Round, Ltd. P'ship, 897 F.3d 433

Background

In 2011 Vangorden settled a $1,631.61 credit‑card debt with Synchrony Bank by paying $571.20; Synchrony confirmed the account would be reported as “paid in full for less than the full balance.”
In May 2016 Second Round purchased the (already settled) account from Synchrony.
On June 22, 2016 Second Round sent Vangorden a collection letter claiming a current outstanding balance of $1,365.39, enclosing a remittance voucher, and including the §1692g validation notice (30‑day dispute right and a statement that the debt will be assumed valid if not disputed).
Vangorden did not dispute the debt under §1692g and sued under FDCPA §§1692e(2), 1692e(10), and 1692f(1), alleging false representation of the debt’s character/amount/status and attempt to collect an amount not authorized by agreement or law.
The district court dismissed for failure to state a claim, reasoning that inclusion of the §1692g notice and plaintiff’s failure to dispute precluded liability; Vangorden appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a debt collector’s inclusion of the §1692g validation notice prevents a §1692e/§1692f claim when the collector falsely reports an indebtedness	Vangorden: §1692g notice does not bar suit; consumer may still sue for misleading/false statements even if she didn’t invoke §1692g	Second Round: inclusion of §1692g and plaintiff’s failure to dispute mean no actionable misrepresentation or liability	Held: §1692g notice does not preclude §1692e/§1692f claims; disputing under §1692g is optional and not a condition precedent to suit
Whether a letter that misstates that a settled debt remains outstanding can plausibly allege violations of §1692e(2) and §1692e(10)	Misstating existence/amount/status of debt and requesting payment plausibly alleges false representation and use of false representation to collect debt	Second Round conceded letter could be false but argued the §1692g notice cures any misleading effect	Held: Allegations that the letter misrepresented the debt and sought payment state plausible §1692e(2) and §1692e(10) claims (FDCPA is strict liability)
Whether attempting to collect an amount not authorized by agreement or law can be alleged under §1692f(1) where the debt was settled	Vangorden: seeking payment of a settled debt fits §1692f(1)’s prohibition on collecting amounts not authorized by agreement	Second Round: §1692g notice and lack of dispute defeat such claim	Held: Pleading that defendant tried to collect an amount not authorized by the settlement states a plausible §1692f(1) claim
Whether the communications could mislead the least sophisticated consumer despite inclusion of §1692g notice	Vangorden: a least sophisticated consumer could be misled—might pay out of fear of credit reporting or confusion despite dispute rights	Second Round: inclusion of §1692g notice prevents misleadingness; least sophisticated consumer would not be misled	Held: The letter could mislead the least sophisticated consumer (misstated existence of debt + credit‑reporting language), so claims survive pleading stage

Key Cases Cited

Carlin v. Davidson Fink LLP, 852 F.3d 207 (2d Cir. 2017) (treating documents attached to complaint on motion to dismiss)
Avila v. Riexinger & Assocs., LLC, 817 F.3d 72 (2d Cir. 2016) (collection notices misleading if open to inaccurate reasonable interpretations)
Arias v. Gutman, Mintz, Baker & Sonnenfeldt LLP, 875 F.3d 128 (2d Cir. 2017) (distinguishing §1692e and §1692f and noting overlapping but different focuses)
Easterling v. Collecto, Inc., 692 F.3d 229 (2d Cir. 2012) (FDCPA strict liability; false statements actionable)
McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240 (3d Cir. 2014) (§1692g dispute is optional; does not bar §1692e suit)
Russell v. Absolute Collection Servs., Inc., 763 F.3d 385 (4th Cir. 2014) (false statement that debt was unsatisfied stated FDCPA claim)
Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir. 1996) (use least‑sophisticated‑consumer standard to evaluate notices)
Gallego v. Northland Group, Inc., 814 F.3d 123 (2d Cir. 2016) (§1692f’s examples are non‑exhaustive and focus on unfair collection practices)