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How Much Are Consumers Supposed to Know About Their Debts? Understanding The “Least Sophisticated Debtor” Standard

§ 1692e of the Fair Debt Collection Practices Act prohibits “false, deceptive, or misleading” behavior, including using “false representation or deceptive means to collect or attempt to collect any debt." Whether a particular communication is false or deceptive is a question of fact. In Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir. 1985), The Eleventh Circuit held that an objective standard of deception looking to judicial interpretations of the Federal Trade Commission Act protecting unsophisticated consumers should be applied in interpreting the FDCPA.

Thus, when evaluating whether debt collection actions are “false, deceptive or misleading,” the Eleventh Circuit and the majority of federal circuit courts have applied a “least sophisticated consumer” test. The least-sophisticated consumer standard is consistent with the FDCPA’s goal of expanding the consumer protections originally provided by the Federal Trade Commission Act. These courts ask whether the “least sophisticated consumer” would be deceived or misled by the communication at issue. No requirement of proof of actual deception of the consumer is necessary.

“The ‘least-sophisticated consumer’ standard is consistent with basic consumer-protection principles.” LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1194 (11th Cir. 2010). Its purpose is “to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd.” As the court explained in LeBlanc:

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. However, the test has an objective component in that while protecting naive consumers, the standard also prevents liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness.

For example, when a communication asserts that a student loan is not eligible for discharge, “the least sophisticated consumer" might very well refrain from seeking the advice of counsel. The capacity of a debt collector's communication to discourage debtors from fully availing themselves of their legal rights is the type of conduct that the FDCPA was designed to target. Under the least sophisticated consumer standard, communications from debt collectors may be deceptive if they are subject to more than one reasonable interpretation, at least one of which is inaccurate. In these cases, a debtor's particular subjective circumstances are irrelevant.

At Loan Lawyers, our South Florida consumer rights and debt defense attorneys help individuals with financial problems that cause hardship. The experienced South Florida defense attorneys at Loan Lawyers are here to review your potential claims against a debt collector, and will help you recover the damages you deserve. Contact our office today by calling (888) FIGHT-13 (344-4813) and see how we can help.