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April 19th, 2023
In Matteo v. EOS USA, Inc., 2023 PA SUPER 51 (Pa. Super March 30, 2023), the Pennsylvania Superior Court affirmed a trial court’s decision to grant EOS USA’s (“EOS”) preliminary objections in the nature of a demurrer (dismissal) in connection with a claim falling under the Federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p, and Pennsylvania Fair Credit Extension Uniformity Act (FCEUSA), 73 P.S. §§ 2270.1-2270.7.
EOS sent Matteo the subject dunning letter:
At EOS CCA we have a goal of helping consumers gain financial freedom and we believe it starts with a willingness to work with you on your account that has been placed with us for collections. You are receiving this notice because payment is past due on the above referenced debt originally owned by VERIZON. We understand and that having an account placed with a collection agency can be difficult. Please be advised we are here to assist and help you. If you cannot pay your balance in full then simply call us at 1-214-XXX-XXXX or 1-844-XXX-XXXX and we can discuss other options with you. * * * This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose.
Matteo filed a Complaint (seeking class action status) under the FCEUA alleging that the Notice of Past Due Account was a false, deceptive, or misleading communication because it: (1) purported to try to collect on debt that was beyond the statute of limitations and beyond the time for reporting to the credit bureaus; (2) offered to “work” with her and offers “other” options to pay the amount due, but does not specify that the statute of limitations applicable to the debt had expired, or what the ramifications of exploring “other options” might be; and (3) did not indicate that Matteo could not be sued on the debt. Matteo also claimed that EOS failed to provide her with validation of the debt notice as required by 15 U.S.C. §1692(g). Matteo did not claim any direct damages as a result of the attempt to collect on the debt; however she sought statutory damages and injunctive relief precluding EOS from sending dunning letters to any Pennsylvania citizen beyond the expiration of the statute of limitations associated with their debts.
Pursuant to Pennsylvania’s FCEUA, “[i]t shall constitute an unfair or deceptive debt collection act or practice under this act if a debt collector violates any of the provisions of the FDCPA.” 73 P.S. 2270.4(a). The FDCPA prohibits debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt,” including falsely representing “the character, amount, or legal status of any debt.” 15 U.S.C. §§ 1692(e), (f).
“[A] communication subject to the FDCPA is deceptive if it can be reasonably read to have two or more different meanings, one of which is inaccurate.” Tatis v. Allied Interstate, LLC, 882 F.3d 422, 427 (U.S. Court of Appeals 3rd Cir. 2018). “[T]hat any such letters, when read in their entirety, must not deceive or mislead the least-sophisticated debtor into believing that she has a legal obligation to pay the time-barred debt.” See Tatis, 882 F.3d at 430.
The statute of limitations’ expiration does not invalidate a debt, but just makes it legally unenforceable. Huertas v. Galaxy Asset Management, 641 F.3d 28, 32 (3d Cir. 2011). As long as the debt collector does not initiate or threaten legal action on a time-barred debt, it is permitted to seek voluntary repayment without advising that the statute of limitations has run. See id. Moreover, the question is not whether the letter offers to settle the debt, but whether, when reading the letter as a whole, it would “deceive or mislead the least-sophisticated debtor into believing that she has a legal obligation to pay the time-barred debt.” See Tatis, 882 F.3d at 430. In this instance, the Court did not find the dunning letter to be false, deceptive, or misleading.
The FCEUA does not provide its own private cause of action; rather, it is enforced through the remedial provision of Unfair Trade Practices and Consumer Protection Law (UTPCPL). 73 P.S. § 2270.5(a). If a debt collector or creditor engages in an unfair or deceptive debt collection act or practice under the FDCPA, it shall constitute a violation of the UTPCPL. In other words, if a debt collector violates the FDCPA, it is an unfair or deceptive debt collection act under the FCEUA, which is a violation of the UTPCPL. Pursuant to the UTPCPL, “[a]ny person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by section 31 of this act, may bring a private action to recover [] damages ….” 73 P.S. § 201-9.2. Accordingly, because Matteo did not allege an ascertainable loss, the Superior Court affirmed the trial court’s decision to grant EOS’ preliminary objections in the nature of a demurrer.
