Deborah L. Olson v. Risk Management Alternatives , Inc .

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 03-2848 & 03-2850
D EBORAH L. O LSON and K EVIN M. S CHULTZ ,
individually and on behalf of all others
similarly situated,
Plaintiffs-Appellants,
v.
R ISK M ANAGEMENT A LTERNATIVES , I NC .,
Defendant-Appellee.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
Nos. 02 C 5918 and 02 C 5750—Harry D. Leinenweber, Judge.
____________
A RGUED J ANUARY 15, 2004—D ECIDED A PRIL 27, 2004
____________
Before C OFFEY , K ANNE , and E VANS , Circuit Judges.
K ANNE , Circuit Judge. The individual plaintiffs, Deborah
Olson and Kevin Schultz, brought identical claims against
Risk Management Alternatives, Inc. (“RMA”) under the
Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq.
(1998) (“FDCPA”). Each plaintiff asserted that RMA
violated § 1692g of the FDCPA by contradicting the re-
quired validation notice and violated § 1692g(a)(1) by failing
to adequately state the amount of the debt as of the date of
the collection letter. The district court granted summary
judgment to RMA, and we affirm.

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2 Nos. 03-2848 & 03-2850
I. History
RMA, a “debt collector” subject to the FDCPA, see 15
U.S.C. § 1692a(6), sent nearly identical form collection let-
ters to Olson and Schultz. The December 24, 2001 letter to
Schultz listed a “Balance” of $4,881.81. The Schultz letter
also stated twice that $1,035.00 was “Now Due.” In much
the same fashion, Olson’s March 18, 2002 letter listed a
“Balance” of $303.34, then twice stated that $146.00 was
“Now Due.”
Each dunning letter, RMA’s first communication with
both of the plaintiffs, contained the statutorily required
validation notice at the bottom of the page. The notice in
each letter stated:
Unless you notify this office within 30 days after re-
ceiving this notice that you dispute the validity of this
debt or any portion thereof, this office will assume this
debt is valid. If you notify the office in writing within 30
days from receiving this notice, this office will: obtain
verification of the debt or obtain a copy of a judgment
and mail you a copy of such judgment or verification. If
you request this office in writing within 30 days after
receiving this notice, this office will provide you with
the name and address of the original creditor, if differ-
ent from the current creditor. We are a debt collector,
attempting to collect a debt and any information
obtained will be used for that purpose.
The validation notice was in the same font, same color,
same format, and same size as the rest of the text of the
letters, and was also on the same side of the paper as all of
the material text.
On August 13, 2002, Schultz filed a complaint against
RMA, on behalf of himself and a class of all others similarly
situated. Shortly thereafter, on August 20, Olson did
likewise. Upon a joint motion for relatedness, Olson’s case
was transferred to the district court where Schultz’s matter
was pending.

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Nos. 03-2848 & 03-2850 3
On June 12, 2003, in an oral ruling, the district court
granted RMA’s summary-judgment motions in both cases
and denied the plaintiffs’ motions for summary judgment.
These appeals followed, and they were consolidated by this
court on August 11, 2003.
II. Analysis
We review de novo the propriety of summary judgment
and questions of statutory interpretation. APS Sports
Collectibles, Inc. v. Sports Time, Inc., 299 F.3d 624, 628 (7th
Cir. 2002). Our only task in this case is to determine if each
letter, on its face, violated § 1692g of the FDCPA as a
matter of law.
The FDCPA requires debt collectors to send a written
validation notice containing certain information to a con-
sumer debtor within five days after initial communication.
See, e.g., Marshall-Mosby v. Corporate Receivables, Inc., 205
F.3d 323, 324-25 (7th Cir. 2000). The notice must include
the amount of the debt, 15 U.S.C. § 1692g(a)(1), the name
of the creditor, 15 U.S.C. § 1692g(a)(2), and a statement
that, unless the debtor “disputes the validity of the debt . .
. the debt will be assumed to be valid by the debt collec-
tor[,]” 15 U.S.C. § 1692g(a)(3). In addition, the notice must
disclose that the debt collector, upon written request by the
debtor within thirty days of receiving the notice, will
provide verification of the debt, 15 U.S.C. § 1692g(a)(4), and
provide the name and address of the original creditor, if
different from the current creditor, 15 U.S.C. § 1692g(a)(5).
If, within the thirty-day period, the debtor notifies the debt
collector that the debt is disputed or requests the name and
address of the original creditor, then the debt collector
“shall cease collection of the debt” until the debt collector
obtains verification of the debt or the name and address of
the original creditor and the requested information is
mailed to the debtor. 15 U.S.C. § 1692g(b).

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4 Nos. 03-2848 & 03-2850
Olson and Schultz make two arguments. First, they assert
that twice stating that a portion of a debt is “Now Due” is
an outright contradiction of the thirty-day validation notice
and thereby violates § 1692g. The second argument is that
RMA’s letters fail to adequately state the amount of the
debt under § 1692g(a)(1) because the letters include two
different amounts—the “Balance” and the amount “Now
Due.”
A. The Effectiveness of the Thirty-Day Validation
Notice
It is undisputed that RMA’s letters include language
tracking the text of 15 U.S.C. § 1692g(a). Thus, RMA’s
initial obligation to provide a validation notice under the
FDCPA has been satisfied. Schultz and Olson argue, how-
ever, that the inclusion of the phrase “Now Due” twice in
the letters contradicts or overshadows the meaning of the
validation notice and therefore deprives them of the knowl-
edge that they had thirty days to contest the debt.
“A debt validation notice, to be valid, must be effective,
and it cannot be cleverly couched in such a way as to evis-
cerate its message.” Avila v. Rubin, 84 F.3d 222, 226
(7th Cir. 1996). The consumer “is to be protected against
confusion, whatever form it takes[,]” be it outright contra-
diction, literal overshadowing, or the failure to explain an
apparent contradiction. Bartlett v. Heibl, 128 F.3d 497, 500-
01 (7th Cir. 1997).
In deciding whether the collection letter is confusing, we
ask whether the validation notice is likely to be understood
by an unsophisticated consumer. See id. at 500; Veach v.
Sheeks, 316 F.3d 690, 692 (7th Cir. 2003). “This assumes
that the debtor is uninformed, naive, or trusting[.]” Veach,
316 F.3d at 693 (internal quotations omitted). However, an
unsophisticated consumer possesses “rudimentary knowl-
edge about the financial world” and is “capable of making

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Nos. 03-2848 & 03-2850 5
basic logical deductions and inferences.” Pettit v. Retrieval
Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th
Cir. 2000).
An unexplained demand for payment within the thirty-
day validation period creates confusion by contradicting,
and thus rendering ineffective, the validation notice. See,
e.g., Bartlett, 128 F.3d at 499-501 (holding that a letter with
the thirty-day validation notice and a threat that the debtor
would be sued if debt was not paid within one week without
an explanation of this apparent contradiction violates §
1692g); Chauncey v. JDR Recovery Corp., 118 F.3d 516, 519
(7th Cir. 1997) (finding that a demand for payment within
thirty days contradicts the validation notice); Avila, 84 F.3d
at 226 (concluding that by following a validation notice with
a statement that “if the above does not apply[,]” then the
recipient has ten days to pay, eviscerates the validation
notice).
We agree with the district court, however, that the words
“Now Due,” when considered in the context of the letters at
issue, do not eviscerate the message conveyed in the debt-
validation notice. The phrase “Now Due,” even to an
unsophisticated consumer, simply means that the debt
collector is willing to accept less than the total balance of
the debt to bring the account to a current status. The con-
sumer has the option of paying the amount due, paying the
total balance, or doing neither and contesting the debt.
These options do not contradict one another. When used in
conjunction with a “Balance” figure, simply listing an
amount “Now Due” does not contradict or overshadow the
validation notice.
B. The Amount of the Debt
The FDCPA requires that “[w]ithin five days after the
initial communication with a consumer in connection with
the collection of any debt, a debt collector shall . . . send the

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6 Nos. 03-2848 & 03-2850
consumer a written notice containing—(1) the amount of
the debt[.]” 15 U.S.C. § 1692g(a). Schultz and Olson argue
that by using two different numbers on the dunning
letters—one for the balance and one for the amount now
due—RMA failed to state clearly the amount of the debt.
The cases cited by Olson and Schultz in support of their
position are inapposite because the dunning letters in those
cases did not state the full amount of the debt anywhere in
the letter. See Veach, 316 F.3d at 692 (letter stated that the
consumer owed additional, unspecified attorney’s fees and
court costs which was untrue because a court had not ruled
on the matter); Miller v. McCalla, Raymer, Padrick, Cobb,
Nichols, and Clark, L.L.C., 214 F.3d 872, 875-76 (7th Cir.
2000) (letter required the consumer to call a toll-free
number to determine the full amount of the debt). The RMA
letters in the instant case prominently display the “Bal-
ance” near the top of the letters.
We conclude that an unsophisticated consumer, able to
make “basic logical deductions and inferences” and to not
interpret collection letters “in a bizarre or idiosyncratic
fashion,” Pettit, 211 F.3d at 1060, would understand that
the amount of the debt is the “Balance” and that the
amount “Now Due” is the portion of the balance that the
creditor will accept for the time being until the next bill
arrives.
III. Conclusion
For the foregoing reasons, we A FFIRM the grant of sum-
mary judgment to RMA in both cases.

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Nos. 03-2848 & 03-2850 7
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—4-27-04

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