can come up with the money to "catch up" his loan or "pay off" the total mortgage debt, the only other alternative is to stay in the house "rent free" for seven months pending foreclosure. The letter fails to advise the homeowner of viable alternatives such as contesting the foreclosure, asserting affirmative defenses, or filing bankruptcy. If relied upon, Fisher's representation that it may be permissible to do nothing for seven months could be extremely damaging since the homeowner would risk a default judgment by not filing an answer to the foreclosure complaint, and would be unable to redeem or reinstate his mortgage after the seven months have elapsed. See 735 ILCS 5/15-1602 & 1603.
Plaintiff claims that this portion of the letter constitutes a violation of § 1692e generally and § 1692e(10) because it misleads the homeowner regarding his options in connection with debt collection, thus promoting debtor default and making it easier for Fisher to foreclose mortgages. Additionally, plaintiff contends that the letter violates § 1692e(15) by falsely implying that no action is required by the homeowner in response to the letter. Since the letter is mailed on the same day that the foreclosure complaint is filed, plaintiff contends that it is deceptive to fail to inform the homeowner that it is necessary to promptly file a responsive pleading in the foreclosure proceedings. Finally, because it is unfair and unconscionable to mislead consumers about their legal rights, plaintiff argues that the letter violates § 1692f.
The defendant responds that the alleged false representations simply do not exist in the letter and that the court should find that the letter complies with the FDCPA as a matter of law. Specifically, defendant argues that plaintiff's claims rest on a strained interpretation of the letter which is based on misleading implications rather than on actual misrepresentations. Instead of limiting a homeowner's options in the manner described by plaintiff, defendant contends that the letter informs the homeowner that he has several options which include: "(1) 'catching up your loan'; (2) 'paying off the total mortgage debt through sale, refinancing, or otherwise'; (3) 'dispute the validity of all or any part of it [the debt]'; (4) 'notify us [Fisher] in writing that you dispute all or a portion of the debt'; and/or (5) 'request the name and address of the original creditor....'" (Amended Mot. for Summary Judgment at 8-9).
Further, by indicating that the validity of the debt must be disputed "within 30 days," the letter properly alerts homeowners that they must take immediate action.
Essentially, defendant here argues that the inclusion of the statutorily required debt validation notice, see 15 U.S.C. § 1692g, adequately informs homeowners that prompt action is required in response to the foreclosure and therefore plaintiff's contention that the letter induces homeowners to sit on their hands is without merit. We acknowledge that Fisher properly includes the required notice in its letters, notifying the debtor that he has 30 days to dispute the validity of the debt. However, courts have recognized that communications by debt collectors may violate the FDCPA even though they literally satisfy the notice requirements. See, e.g., Avila, 84 F.3d at 226; Gordon v. Fink, 1995 U.S. Dist. LEXIS 1509, No. 93- C-4152, 1995 WL 55242, at *2 (N.D.Ill. Feb. 8, 1995); Vaughn, 1995 U.S. Dist. LEXIS 1358, 1995 WL 51402, at *3 The standard for determining when an otherwise complying notice constitutes a violation of the FDCPA was set forth in Swanson v. Southern Or. Credit Serv., 869 F.2d 1222, 1225 (9th Cir. 1988):
The statute is not satisfied merely by inclusion of the required debt validation notice; the notice Congress required must be conveyed effectively to the debtor.... Furthermore, to be effective the notice must not be overshadowed or contradicted by other messages or notices appearing in the initial communication from the collection agency.