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Boilerplate Language Does Not Trigger FDCPA Case Provides Excellent Guidance on Debtor Communication

  • Written by Steel Rose

In Heinz v. Carrington Mortgage Services LLC, the Eighth Circuit held that the mere inclusion of boilerplate disclosure language does not transform an otherwise benign informational communication into one meant to induce payment by the debtor under the “animating purpose” test, which makes a holistic consideration of an individual communication’s purpose to determine whether it implicates the protections of the FDCPA.

Heinz filed a suit against Carrington in state court on June 8, 2018, alleging violation of the FDCPA and two state law causes of action. However, by the summary judgment stage, only the FDCPA claim remained. At that point, the district court granted summary judgment in favor of Carrington, concluding that Carrington’s communications and conduct while dealing with Heinz were not in connection with an attempt to collect a debt under the “animating purpose” test. Finding that Carrington could not be found by a jury to have made communications to Heinz with this purpose, the district court dismissed his claim.

On appeal, Heinz argued that the district court erroneously narrowed the “animating purpose” test. In particular, Heinz relied on the Supreme Court’s decision in Obduskey v. McCarthy & Holthus LLP to argue nonjudicial foreclosure is a debt collection activity and that each communication related to the foreclosure at issue was by extension an attempt to collect a debt. Rejecting this argument, the Eighth Circuit reasoned that “[a]lthough nonjudicial foreclosure is a debt collection activity, it does not follow that any communication generated during a nonjudicial foreclosure is made ‘in connection with the collection of a debt.'”

The Eighth Circuit noted that “[a]lthough the [October 8] letter stated, ‘if your loan is delinquent collection activity may continue, including referral to foreclosure or foreclosure sale,’ this boilerplate, conditional reference to collection activities, which uses the word ‘if,’ does not mean that the letter was sent ‘in connection with the collection of a debt.'” Even more notable, the Eighth Circuit held that although each letter plainly stated that “[t]his communication is from a debt collector and it is for the purpose of collecting a debt and any information obtained will be used for that purpose,” the inclusion of such a boilerplate statement “[does] not automatically trigger the protections of the FDCPA, just as the absence of such [disclosures] does not have dispositive significance.” Because the “animating purpose” of the letters was not to induce Heinz to pay his outstanding debt, this boilerplate language did not turn the communication into debt collection activity despite the plain language stating otherwise.

This case provides debt collectors in the Eighth Circuit (and elsewhere) with excellent guidance on the appropriate use of boilerplate language in communications with debtors. Although it may seem contrary to the plain language of the FDCPA, the mere use of boilerplate language is (at least in the Eighth Circuit) insufficient to transform an informational communication into debt collection activity that might otherwise trigger the protections of the FDCPA.

To read more details of the case, click here.