The opinion of the court was delivered by: Judge Joan B. Gottschall
Plaintiff Edward Day sued defendants Check Brokerage Corporation ("CBC") and Dean Slough (collectively referred to as "defendants"), alleging that defendants sent him and the class he represents various debt collection letters that violate the Fair Debt Collection Practices Act, 15 U.S.C. §1692 (2006) ("FDCPA"). Specifically, Day alleges that defendants sent him a series of collection letters that were false, deceptive, or misleading as determined by the unsophisticated consumer standard and therefore violate 15 U.S.C. §§ 1692e, e(2)(A), e(5), and e(10); that defendants used unfair or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. §§ 1692f and f(1); and that defendants contradicted and/or overshadowed Day's right to dispute the alleged debt within thirty days of receipt of the initial communication in violation of 15 U.S.C. § 1692g(a). On March 2, 2007, the court granted plaintiff's motion for class certification. Presently before the court are defendants' motion for summary judgment and Day's motion for partial summary judgment. For the reasons that follow, Day's motion is granted in part and denied in part and defendants' motion is granted in part and denied in part.
Between March 3, 2005 and March 31, 2005, CBC, a debt collector, sent a series of four letters to Day in an attempt to collect a debt of $20.40 he owed to Oberweis Dairy ("Oberweis"). In the first letter, dated March 3, 2005, CBC informed Day that a check he had written to Oberweis for the amount of $20.40 did not clear. The letter stated that CBC had been retained by Oberweis to act as its agent in the collection of the check and that Day now owed CBC a total of $65.40. The total amount was comprised of (i) the initial amount of the check ($20.40); (ii) a $25.00 "Return Check Charge"; and (iii) a $20.00 "Bank charge to Merchant." The letter further stated that failure to make a prompt payment could result in additional fees and that it was in Day's "best interests to clear this check immediately." The final paragraph of the letter contained a notification that Day had thirty days to dispute the validity of the debt.
On March 17, 2005, CBC sent Day a second letter demanding the $65.40 and stating, "You were recently advised that the above check did not clear your bank and is now the property of Check Brokerage Corporation. . . . we suggest you give this matter your immediate attention." The letter then referred to and quoted Illinois Commercial Code § 3-806 regarding the liability for issuing a dishonored check. The quoted section stated that a person who issues a bad check shall be liable for "$25, or for all costs and expenses, including reasonable attorney fees, incurred by any person in connection with the collection of the amount for which the check was written . . . [.]"
On March 24, 2005, CBC sent Day a third letter demanding the $65.40 and stating, "WE MUST HAVE YOUR PAYMENT NOW!!" The letter then informed Day that, under Illinois law, he "could be liable for the amount of the check plus three times the amount of the check (not less than $100 and not more than $1500) plus attorney fees and court costs." The letter further stated that, "additional charges are incurred the longer this remains unpaid."
On March 31, 2005, CBC sent Day a fourth letter demanding the $65.40 and stating, "THIS CHECK REMAINS UNPAID! WE ARE, THEREFORE, GOING TO SHOW YOU HOW MUCH IT COULD COST SHOULD IT GO TO LITIGATION." The letter then details, inter alia, how a judgment would cost Day a total of $363.00, how his failure to appear in court for the citation hearing would result in a warrant for his arrest, and states that judgments "are usually picked up by CREDIT BUREAUS and can have an adverse effect on your future credit." The letter concludes by stating, "Common sense would dictate that this check be paid at this point. THE AMOUNT DUE, INCLUDING THE CHECK AND SERVICE CHARGES TO THIS POINT, IS $65.40."
Summary judgment is granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A party opposing summary judgment must "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is no genuine issue for trial unless there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Id. The party moving for summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 321 (1986).
When evaluating FDCPA claims, the court evaluates communications from debt collectors "through the eyes of an unsophisticated consumer." Jang v. A.M. Miller & Assocs., 122 F.3d 480, 483-84 (7th Cir. 1997); Avila v. Rubin, 84 F.3d 222, 226 (7th Cir. 1996). The unsophisticated consumer is a "hypothetical consumer whose reasonable perceptions will be used to determine if collection messages are deceptive or misleading." Gammon v. GC Servs. Ltd. P'ship, 27 F.3d 1254, 1257 (7th Cir. 1994). This presumes a level of sophistication that "is low, close to the bottom of the sophistication meter," Avila, 84 F.3d at 226, and "protects the consumer who is uninformed, naive, or trusting," Gammon, 27 F.3d at 1257.
As an initial matter, the court notes that it disagreed with how Day organized some of his arguments (and which FDCPA sections were violated). As noted more specifically below, the court has chosen to place and analyze Day's arguments in the FDCPA sections it feels are the most logical and suitable.
The FDCPA prohibits debt collectors from using "unfair or unconscionable means to collect or attempt to collect any debt," including "the collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law." 15 U.S.C. §§ 1692f and f(1). In addition to Day's original debt, defendants attempted to collect two additional fees: a $25.00 "Return Check Charge" and a $20.00 "Bank charge to Merchant." These additional amounts are allowed only if they are authorized by the agreement creating the debt or permitted by law. Id.
Defendants argue that both charges were proper because the Check Recovery Agreement (the contract between CBC and Oberweis) specifically allowed CBC to collect a $20.00 "bank charge" per check. The fact that the Check Recovery Agreement allowed for this charge is irrelevant; the issue is whether the agreement creating the debt allowed for such a charge. Because neither party mentions such an agreement, the only way the charges were proper is if they were "permitted by law." In order to determine whether the charges were "permitted by ...