Summation of LSC Law

[David A. Szwak]

LEAST SOPHISTICATED CONSUMER, DEBTOR OR UNSOPHISTICATED CONSUMER STANDARD

Courts have generally held that whether a communication or other conduct violates the FDCPA is to be determined by analyzing it from the perspective of the "least sophisticated consumer" or "least sophisticated debtor." Taylor v. Perrin Landry, deLaunay and Durand, 103 F.3d 1232, 1236 (5th Cir. 1997); United States v. National Financial Services, Inc., 98 F.3d 131 (4th Cir. 1996); Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir. 1996); Bentley v. Great Lakes Collection Bureau, 6 F.3d 60 (2d Cir. 1993); Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993); Smith v. Transworld Systems, Inc., 953 F.2d 1025 (6th Cir. 1992); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir. 1991); Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1225-26 (9th Cir. 1988); Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir. 1985). See: Youngblood v. G.C. Services, Ltd., 186 F.Supp.2d 695, 698 (U.S.D.C. W.D. Tex. 2002) (discussion of the various standards without deciding which is appropriate to apply).

[David A. Szwak]

"The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd." Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993).

[David A. Szwak]

“This standard serves the dual purpose of protecting all consumers, including the inexperienced, the untrained and credulous, from deceptive debt collection practices and protecting debt collectors against liability for bizarre or idiosyncratic consumer interpretations of collection materials.â€

[David A. Szwak]

“While protecting naive consumers, the standard also prevents liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanding and willingness to read with care.â€

[David A. Szwak]

The Seventh Circuit has held that a more appropriate formulation was that a violation should be determined from the perspective of the "unsophisticated consumer." Gammon v. GC Services L.P., 27 F.3d 1254 (7th Cir. 1994).

[David A. Szwak]

In Avila v. Rubin, 84 F.3d 222, 227 (7th Cir. 1996), the Seventh Circuit stated: "Gammon does not significantly change the substance of the "least sophisticated consumer" standard as it had been routinely applied by courts. Instead, Gammon concluded that the term "unsophisticated consumer" is a simpler and less confusing formulation of a standard designed to protect those of below-average sophistication or intelligence. As a result, the court stated "[w]e will use the term, 'unsophisticated,' instead of the phrase, 'least sophisticated,' to describe the hypothetical consumer whose reasonable perceptions will be used to determine if collection messages are deceptive or misleading." Gammon, 27 F.3d at 1257. The new terminology reconciles the former standard's literal meaning with its application. Id. As Avila correctly observes, the unsophisticated consumer standard is a distinction without much of a practical difference in application.

[David A. Szwak]

In Bartlett v. Heibl, 128 F.3d 497, 500 (7th Cir. 1997), the Seventh Circuit stated: "It would be better if the courts just said that the unsophisticated consumer is to be protected against confusion, whatever form it takes." In cases where the FDCPA violation is clearly evident on the face of the collection letter, the court may award summary judgment for the FDCPA plaintiff. On the other hand, "when the letter itself does not plainly reveal that it would be confusing to a significant fraction of the population, the plaintiff must come forward with evidence beyond a the letter and a beyond his own self serving assertions that the letter is confusing in order to create a general issue of material fact for trial." Durkin v. Equifax Check Servs., 406 F.3d 410, 415 (7th Cir. 2005).

[David A. Szwak]

As another court described: “The unsophisticated consumer, while not at the bottom rung of the ladder, is still unsophisticated--uninformed, naive, trusting, possessing below average intelligence.â€