Eighteen years ago, the Seventh Circuit crafted “safe harbor” language which, if used, shielded debt collectors from liability under 15 U.S.C. § 1692g. A recent decision, Boucher v. Fin. Sys. of Green Bay, 2018 U.S. App. LEXIS 1094 (7th Cir. 2018), now calls that safe harbor language into question and subjects collectors to liability under another section of the Fair Debt Collection Practices Act (“FDCPA”), § 1692e, for use of the language the court itself drafted.
Section 1692g requires debt collectors to disclose, among other information, the “amount of the debt” a consumer owes. See 15 U.S.C. § 1692g(a)(1). This requirement is particularly onerous, as many debts are subject to fees, interest, and other charges which can increase the amount of the debt owed on a daily basis. To help deal with this reality, the Seventh Circuit in Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, LLC, 214 F.3d 872 (7th Cir. 2000) fashioned safe harbor language which, the Court held, satisfied the debt collector’s duty to state the “amount of the debt.” Commonly known as the Miller safe harbor, the language reads as follows:
As of the date of this letter, you owe $ [the exact amount due]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check, in which event we will inform you before depositing the check for collection. For further information, write the undersigned or call 1-800-[phone number].
Miller, 214 F.3d at 876. After Miller, many debt collection companies began including this or similar language in communications with debt collectors. In Boucher v. Fin. Sys. of Green Bay, 2018 U.S. App. LEXIS 1094 (7th Cir. 2018), however, the Seventh Circuit called into question the propriety of relying on the Miller safe harbor language in communications with consumers by holding that such language was misleading under § 1692e, which broadly prohibits the use of any “false, deceptive, or misleading representation or means in connection with the collection of any debt.”
In Boucher, the debt collector, Finance System of Green Bay (“Green Bay”), was collecting upon medical debt and sent a letter to a consumer that included the Miller safe harbor language. The Seventh Circuit held that the safe harbor language – which was included in the letter to satisfy § 1692g and comply with Miller – was “false, deceptive, or misleading” within the meaning of § 1692e. According to the Court, because Wisconsin law prohibits debt collectors from imposing “late charges or other charges” (beyond interest) on medical debt, the letter “falsely implies a possible outcome—the imposition of ‘late charges and other charges’—that cannot legally come to pass.” Id. at *9. Although the Miller language is not misleading or deceptive on its face, the Court found it may “nevertheless be inaccurate” under certain circumstances.
In reaching this result, the Court held that debt collectors cannot “copy and paste the Miller safe harbor language to avoid liability under § 1692e.” Troublingly, the Court held that “[a]lthough the safe harbor was offered in an attempt both to bring predictability to this area and to conserve judicial resources, it is compliance with the statute, not our suggested language, that counts.” Since “judicial interpretations cannot override the statute itself,” the Court implicitly suggested that debt collectors may need to ignore judicial opinions interpreting the statute, as the Court may interpret the statute differently in the future.
What does Boucher mean for Debt Collectors?
After Boucher, debt collectors cannot simply include Miller’s language to communications with consumers and be protected from liability under § 1692g and § 1692e. Debt collectors must consider all of the circumstances, including the requirements of state law, and determine whether the Miller language is accurate before including it in a communication with a consumer. This includes providing detailed information from which an unsophisticated consumer can determine whether their debt will increase.