debt collection - FDCPA - letter from mortgage servicer was "in connection with collection of debt"
Gburek v. Litton Loan Servicing - 7th Cir. - July 27, 2010
Generally speaking, a communication from a debt collector to a debtor is not covered by the FDCPA unless it is made “in connection with the collection of any debt.” FDCPA §§ 1692c, 1692e. Defendant's offers to participate in loan-workout was made “in connection with” debt collection efforts, even though they did not contain an explicit demand for payment.
The mortgage was in default, and the text of the letters indicate they were sent to induce the homeowner to settle her mortgage-loan debt in order to avoid foreclosure. The complaint thus sufficiently alleges communications that were “sent in connection with an attempt to collect a debt,” Ruth v. Triumph P’ships, 577 F.3d 790, 798 (7th Cir. 2009), and were in violation of the FDCPA.
Neither the 7th Circuit nor any other has established a bright-line rule for determining whether a communication from a debt collector was made in connection with the collection of any debt. However, the court cited three of its cases that is said established that "the absence of a demand for payment is just one of several factors that come into play in the commonsense inquiry of whether a communication from a debt collector is made in connection with the collection of any debt. The nature of the parties’ relationship is also relevant, as are a "communication made specifically to induce the debtor to settle her debt," and the payment status of the account.