Decisions Highlight Relevance of Responses to Alleged Misrepresentation in FDCPA Cases

Business Litigation Update

Date: June 16, 2020

Key Notes:

  • Deposition testimony on materiality can be crucial.
  • Independent evidence on materiality may be dispositive.

A pair of decisions handed down on June 9, when considered in tandem, highlight the intricacies litigants face regarding claims under the Fair Debt Collection Practices Act (FDCPA). At the forefront of current FDCPA litigation is the ongoing battle over whether false statements must also be material to be actionable. In Frank v. Autovest,[1] the D.C. Circuit declined to address whether materiality was required for a viable FDCPA claim, instead holding that in the absence of evidence that a plaintiff was misled, the plaintiff did not suffer an actual injury and thus lacks Article III standing under Spokeo. Meanwhile, in Johnson v. Enhanced Recovery Company, the Seventh Circuit held that, even where a plaintiff was misled (and therefore has standing), a debt collector’s potentially misleading statement does not give rise to an FDCPA claim in the absence of evidence that the hypothetical unsophisticated consumer would have also been misled.


The FDCPA was enacted as an attempt to curb abusive debt collection practices and ensure that debt collectors who refrain from using abusive practices are not competitively disadvantaged. It allows consumers to sue debt collectors who use “false, deceptive, or misleading representation[s]” to collect a debt. Although courts often cite to the same materiality standard (i.e., whether the hypothetical “least sophisticated consumer” or, in some jurisdictions, “unsophisticated consumer” would have been misled), courts have considered varying types of evidence in making materiality determinations. Some have considered the plaintiff’s own actions, while others have considered consumer surveys or other evidence of how the “hypothetical” consumer would have reacted. These divergent approaches have left FDCPA litigants, plaintiffs and defendants alike, trying to determine whose behavior is relevant – the plaintiff’s or the hypothetical consumer’s? The answer, as evidenced by the recent decisions in Frank and Johnson, is “both.”

Frank v. Autovest – Standing

Phyllis Frank defaulted on a loan, which was subsequently acquired by Autovest. In its suit to collect the outstanding balance, Autovest submitted a verification and an affidavit signed by employees of its servicer, Michael Andrews and Associates (MAA). The documents, however, identified each of the signers as an “agent/officer/employee” or “employee” of Autovest.

After the collection action was dismissed, Frank filed a putative class action against Autovest and MAA in federal court alleging that the verification and affidavit contained “false, deceptive, or misleading representations” in violation of the FDCPA. At her deposition, however, Frank denied taking or refraining from taking any action as a result of the statements in the verification and affidavit. The district court granted the defendants’ summary judgment motion, reasoning that any falsity in the verification and affidavit were immaterial – and thus not actionable – because they “had no effect on Frank’s ability to respond to or to dispute the debt.”

Frank appealed to the D.C. Circuit, arguing that her admission that she had not taken any action was irrelevant because the misstatements were allegedly per se violations of the FDCPA and objectively misleading to the least sophisticated consumer.

Rather than address the FDCPA claim on the merits, the court held that Frank lacked standing to bring the claim under Spokeo, noting that although Frank had satisfied her burden at the pleading stage by including general allegations of injury, she failed to demonstrate a concrete personal injury traceable to the false representations in the verification and affidavit because she testified that she neither took, nor refrained from taking, any action because of the statements. The court noted that while a misrepresentation in a debt collector’s affidavit “is certainly capable of causing a concrete and particularized injury,” Frank failed to demonstrate that the statements had that effect. “Without that showing, Frank lacks standing – even if Autovest and [MAA] violated the FDCPA.”

Johnson v. Enhanced Recovery Company – Materiality

Erin Johnson brought a putative class action against Enhanced Recovery Company (ERC), alleging that a letter stating that her “delinquent account may be reported to the national credit bureaus” was misleading and deceptive because it implied the possibility of future action, when in reality, ERC began credit reporting three days after sending the letter and before Johnson received it. Johnson claimed that the statement amounted to a false promise that if she took advantage of the letter’s settlement offer then ERC would not report her debt to the credit bureaus.

The district court declined to dismiss the FDCPA claim, concluding that the allegedly confusing interpretation of the letter was at least plausible. It subsequently granted ERC’s motion for summary judgment because Johnson failed to demonstrate that “the language in question would be confusing or misleading to a significant fraction of the population.” Johnson appealed.

The Seventh Circuit affirmed the district court’s grant of summary judgment because “Johnson failed to present any evidence beyond her own opinion that ERC’s letter was misleading.” The court explained Seventh Circuit precedent categorizing FDCPA cases into three groups: cases where the challenged language is obviously not misleading and therefore no extrinsic evidence of confusion is required; cases where the challenged language is not misleading on its face but could be construed as misleading, in which case extrinsic evidence is required (e.g., consumer surveys demonstrating that consumers are in fact confused); and cases where the challenged language is obviously misleading and no additional evidence is necessary. The court determined that Johnson’s claim belonged in the second category and therefore rejected her contention that no additional evidence of confusion was required. Although Johnson’s showing that she was personally confused “may be sufficient to withstand dismissal for failure to state a claim,” at the summary judgment stage she “must do more than simply propose a potentially misleading interpretation” of the letter. “Johnson bore the burden of producing evidence beyond her own say so demonstrating the likelihood that an unsophisticated debtor would conclude as much. It is not enough that Johnson reached such a conclusion; ‘under the FDCPA, confusion is not in the eyes of the beholder.’”


The decisions in Frank and Johnson highlight why, in many instances, evidence of both the plaintiff’s and the least sophisticated (or unsophisticated) consumer’s reaction to an alleged FDCPA violation are not only relevant but required. Federal courts continue to grapple with Spokeo’s implications in consumer financial services cases, as well as whether misrepresentations must be material to state an FDCPA claim (and, if so, what evidence of materiality is required). Accordingly, a defendant in an FDCPA case should carefully consider whether a plaintiff can prove anything more than a bare procedural violation under the Act and whether a plaintiff with standing is able to prove that the alleged misrepresentation was materially misleading.


For more information, please contact:

Jessica E. Salisbury-Copper

Scott A. King

Joe Barton

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[1] Thompson Hine represented the defendants in Frank before the U.S. District Court for the District of Columbia and the D.C. Circuit.