The 'Least Sophisticated Consumer' Rule

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 The "Least Sophisticated Consumer" Standard

Okay folks, time to put on your legal-eagle hats.  It's time for some heavy stuff!!  This post is about a legal principle that most people do not know about, and is a term you will only hear during FDCPA litigation.

You lazy readers better run!!  I'm going to be using the dreaded enemy of the non-critical thinker: legal citations to case law!!  But seriously, this post is not for the faint of heart.  It's jam-packed with A LOT of legal terms and information for those of you who might have the ability to represent themselves pro-se in a court of law.  And away we go...

Most debt collectors are mean, abusive and intimidating individuals.  The rest are scum. I can understand they have a job to do, but many of them use tactics so horrible that Congress had to create a whole body of law just to regulate how they conduct business.  One of the deceitful and abusive tactics they use is sending you a dunning letter that looks like a legal pleading, or gives the indication that you are being sued by a lawyer because the letter-head looks like it is from a lawyer's office. 

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. This standard is consistent with the norms that courts have traditionally applied in consumer-protection law. 



The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious.
 To serve the purposes of the consumer-protection laws, courts have attempted to articulate a standard for evaluating deceptiveness that does not rely on assumptions about the "average" or "normal" consumer. This effort is grounded, quite sensibly, in the assumption that consumers of below-average sophistication or intelligence are especially vulnerable to fraudulent schemes. The least-sophisticated-consumer standard protects these consumers in a variety of ways. First, courts have held that collection notices violate the FDCPA if the notices contain language that "overshadows" or "contradicts" other language that informs consumers of their rights. See Graziano, 950 F.2d at 111 (notice of right to respond within thirty days is not effectively communicated when presented in conjunction with contradictory demand for payment within ten days); see also Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1225 (9th Cir.1988)

The least sophisticated consumer standard is derived from 15 USC § 1692e of the Fair Debt Collections Practices Act under the heading False and Misleading Representations.  The most widely accepted test for determining whether a collection letter violates § 1692e is an objective standard based on the "least sophisticated consumer." This standard has been widely adopted by district courts in this circuit. See, e.g., Johnson v. NCB Collection Services, 799 F.Supp. 1298, 1306 (D.Conn. 1992); Rabideau v. Management Adjustment Bureau, 805 F.Supp. 1086, 1094 (W.D.N.Y.1992); Britton v. Weiss, 1989 WL 148663, at *2, 1989 U.S.Dist. LEXIS 14610, at *6 (N.D.N.Y. Dec. 18, 1989); cf. Riveria v. MAB Collections, Inc., 682 F.Supp. 174, 178 (W.D.N.Y.1988) (using "unsophisticated consumer" standard).

This standard has also been adopted by all federal appellate courts that have considered the issue. See Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1028 (6th Cir.1992); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.1991); Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1174-75 (11th Cir.1985); Baker v. G.C. Services Corp., 677 F.2d 775, 778 (9th Cir.1982). But see Blackwell v. Professional Business Services, of Georgia, Inc., 526 F.Supp. 535, 538 (N.D.Ga.1981) (applying "reasonable consumer" standard). We now adopt the least-sophisticated consumer standard for application in cases under § 1692e. In doing so, however, we examine in some detail the purposes served by this standard as well as the extent of the liability that it creates.

In addition, courts have found collection notices misleading where they employ formats or typefaces which tend to obscure important information that appears in the notice. See Baker, 677 F.2d at 778 (required information must be "large enough to be easily read and sufficiently prominent to be noticed"). Finally, courts have held that collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate. See Dutton v. Wolhar, 809 F.Supp. 1130, 1141 (D.Del.1992) ("least sophisticated debtor is not charged with gleaning the more subtle of the two interpretations" of collection notice); Britton, 1989 WL 148663, at *2, at *6 (deceptiveness of collection notices "should be assessed in terms of the impression likely to be left on the unsophisticated consumer").

It should be emphasized that in crafting a norm that protects the naive and the credulous the courts have carefully preserved the concept of reasonableness. SeeRosa v. Gaynor, 784 F.Supp. 1, 3 (D.Conn. 1989) (FDCPA "does not extend to every bizarre or idiosyncratic interpretation" of a collection notice but "does reach a reasonable interpretation of a notice by even the least sophisticated"). Indeed, courts have consistently applied the least-sophisticated-consumer standard in a manner that protects debt collectors against liability for unreasonable misinterpretations of collection notices. One court has held, for example, that collection notices are not deceptive simply because certain essential information is conveyed implicitly rather than explicitly. See Transworld Systems, 953 F.2d at 1028-29 (collection notice that does not expressly inform debtors of right to contest portion of debt is not misleading, because that right is "implicit" in right to challenge entire debt). Other courts have held that even the "least sophisticated consumer" can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care. See Johnson, 799 F.Supp. at 1306-07 (finding that "even the least sophisticated debtor knows that a `Revenue Department' may be part of a department store or other commercial creditor just as it may be a governmental body"); Gaetano v. Payco of Wisconsin, Inc., 774 F.Supp. 1404, 1411 (D.Conn.1990) (approving collection notice even though required disclosures were printed only on the back of the notice, since language on the front directed consumers to read the reverse).

It should be emphasized that the use of any false, deceptive, or misleading representation in a collection letter violates § 1692e— regardless of whether the representation in question violates a particular subsection of that provision. If one portion of the letter is deceptive, and another portion is not - the whole letter is deemed deceptive.

Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 116, 58 S.Ct. 113, 115, 82 L.Ed. 141 (1937) (finding encyclopedia-selling scheme in violation of Federal Trade Commission Act). We subsequently sounded the same theme in our consumer-protection cases, holding that the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 41 et seq., was not made "`for the protection of experts, but for the public — that vast multitude which includes the ignorant, the unthinking and the credulous.'"  Charles of the Ritz Distributors Corp. v. Federal Trade Commission,143 F.2d 676, 679 (2d Cir.1944), quoting Florence Manufacturing Co. v. J.C. Dowd & Co., 178 F. 73, 75 (2d Cir.1910). This basic principle of consumer-protection law took on its modern formulation several years later, when we held that "in evaluating the tendency of language to deceive, the Federal Trade Commission should look not to the most sophisticated readers but rather to the least." Exposition Press, Inc. v. Federal Trade Commission, 295 F.2d 869, 872 (2d Cir.1961).

In recent years, as courts have incorporated the jurisprudence of the FTC Act into their interpretations of the FDCPA, the language of Exposition Press has gradually evolved into what we now know as the least-sophisticated-consumer standard. See, e.g., Jeter, 760 F.2d at 1174-75; Baker, 677 F.2d at 778.