Jennifer Smith v. Computer Credit, Inc.Jennifer Smith v. Computer Credit, Inc.
OPINION
Jеnnifer Smith appeals the district court’s grant of Computer Credit, Inc.’s motion to dismiss. Smith argues that a letter sent by Computer Credit, a debt collection agency, violated the Fair Dеbt Collection Practices Act,
I.
Computer Credit, Inc., a third-party debt collector, sent three letters to Smith regarding a $1,555.49 debt she owed to Miami Valley Hospital. The first letter, dated March 8, 1996, read: “please see important notice on back.” The back of the lеtter stated:
NOTICE. This debt will be assumed to be valid unless you dispute the validity of the debt, or any portion thereof, within thirty days after receipt of this notice. If you notify us, in writing, within this thirty-day period that the dеbt, or any portion thereof, is disputed, we will obtain verification of the debt or a copy of a judgment, as applicable, and a copy of such verification or judgment will be mailed to you. Upon written request within the thirty-day period, we will provide you with the name and address of the original creditor if different from the named creditor.
The second letter, dated March 21, said:
Fourteen dаys have passed since Computer Credit, Inc.’s last communication with you, and your seriously delinquent balance with Miami Valley Hospital still remains unpaid. In the absence of a valid reason for nonpayment, this debt must be paid. If we are not notified that your debt has been paid before April 4, 1996, and if this debt is not disputed, we shall advise you of our final position rеgarding the status of your account.
A third letter, dated April 4, informed Smith that Computer Credit would stop its attempts to collect her debt and return the account to Miami Valley Hospital.
On February 28, 1997, Smith filed a complaint in the district court against Computer Credit, alleging a violation of
II.
This Cоurt reviews a district court’s decision to grant a motion to dismiss for failure to state a claim
de novo. Miller v. Currie,
Under the Act, notice of the thirty-day validation period is necessary, but not sufficient to satisfy
The Ninth Circuit has had two occasions to consider whаt a debt collector must do to “effectively convey” notice of the validation period. In
Swanson,
The letter at issue in the present case differs from the letter in Swanson in two important respects. First, Consumer Credit presented both the text of the letter and the validation notice in uniform font. The first letter clearly directed Smith to refer to the back of the letter for an “important notice,” which informed her of her thirty-day validation period. Second, Consumer Credit’s letter did not threaten Smith’s statutory validation period. The letter stated only that if Smith did not pay the debt by April 4, Computer Credit would advise her of its “final position regarding her account.” The letter in Swanson, on the other hand, contained the implicit threat that if the consumer did not ignore his thirty-day validation period and pay his debt immediately, he would lose his good credit rating.
The present case more closely resembles
Terran v. Kaplan,
Similarly, Computer Credit’s letter did not “threаten or encourage” the least sophisticated debtor to ignore his thirty-day validation period. The Ninth Circuit found that the letter in Terran did not threaten the least sophisticated сonsumer’s right to a thirty-day validation period, although it suggested that legal action may ensue if Terran did not call the debt collection attorney’s office immediately. Computer Credit’s letter did not threaten the validation period by stating that Consumer Credit would advise Smith of its “final position” if she did not pay her debt by April 4. Moreover, Computer Credit’s final positiоn was simply to cease all debt collection efforts and return the account to Miami Valley Hospital.
Terran
stated that “[a] demand for payment within less than the thirty-day time-framе necessarily requires the debtor to forego the statutory right to challenge the debt in writing within thirty days, or suffer the consequences.”
Id.
at 1434. Unless a collection agency offers a threat with which to back up its request for payment, that request does not constitute a “demand.” A collection agency does not have to stop its collection еfforts to comply with the Act. Instead, it must ensure that its efforts do not threaten a consumer’s right to dispute the validity of his debt. Consumer Credit’s letter did not state that Computer Credit would institute legal action or imply that Smith would suffer from bad credit if she did not pay her debt by April 4. The second letter referred to Smith’s right to dispute the debt. In addition, Computer Credit ultimately ceased аll attempts to collect Smith’s debt and returned the debt to Miami Valley Hospital. Consumer Credit’s letter therefore did not “threaten or encourage the least sophisticated debtor to waive his statutory right to challenge the validity of the debt.”
Id.
Accordingly, we hold that Computer Credit’s communications “effectively conveyed” the validation notice of
III.
Even the least sophisticated consumer would not have understood the language contained in Computer Credit’s second letter to threaten his right to dispute the validity of his debt within thirty days. Accordingly, we hold that the district court was correct in granting Computer Credit’s motion for failure to state a claim on which relief could be granted. AFFIRMED.