In the
United States Court of Appeals
For the Seventh Circuit
No. 07-3581
C HARLOTTE V. M UHA and M ARY C AJSKI,
on behalf of themselves and
all others similarly situated,
Plaintiffs-Appellants,
v.
E NCORE R ECEIVABLE M ANAGEMENT, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 05-C-940—J.P. Stadtmueller, Judge.
A RGUED S EPTEMBER 8, 2008—D ECIDED M ARCH 10, 2009
Before P OSNER, K ANNE, and T INDER, Circuit Judges.
P OSNER, Circuit Judge. The Fair Debt Collection Practices
Act, so far as relates to this case, forbids a debt collector
(which the defendant is) to “use any false, deceptive, or
misleading representation . . . in connection with the
collection of any debt.” 15 U.S.C. § 1692e. The defendant
2 No. 07-3581
sent a dunning letter to credit card debtors, including the
plaintiffs and the 7,000 or so other members of the class
that the plaintiffs represent, which states (with irrelevant
boilerplate language omitted):
The above referenced account has been referred to
our office for collection of the balance in full. Previous
attempts have been made by our client to resolve this
debt voluntarily. As of this date, those attempts have
not been successful. Therefore, your original agreement
with the above mentioned creditor has been revoked.
Encore Receivable Management, Inc. [the defendant
debt collector] has been authorized by our client to
provide the necessary effort to collect this debt. We
recommend that you take advantage of this opportu-
nity to pay the balance in full to prevent further
collection activity.
* * *
Unless you notify this office within 30 days after
receiving 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 this 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.
The plaintiffs allege that the sentence that we have itali-
cized in the first paragraph of the letter is false, and they
sought to bolster this allegation with deposition testimony
that specific provisions of the credit-card contract were
No. 07-3581 3
still in effect, in which event the agreement itself had not
been “revoked.” Certainly the payment requirements of
the contract were still in effect—they were the basis of the
attempt to collect a “debt” due to the issuer. The plaintiffs
argue that this false statement was misleading and con-
fusing, a claim they attempted to support with a con-
sumer survey. The district judge excluded the survey
and went on to rule that the challenged sentence is true
because it clearly means only that the debtors’ credit-card
privileges have been revoked; and so he granted sum-
mary judgment for the defendant.
The judge was right to exclude the survey. Although
the plaintiffs hired a competent survey researcher to
conduct it, the questions he asked in the survey were
drafted not by him but by the plaintiffs’ lawyer. That has
turned out to be a mistake. A consumer survey, to
be sufficiently objective to be usable as evidence in a
suit under the Fair Debt Collection Practices Act, depends
among other things on “whether the questions are
leading or suggestive.” American Home Products Corp. v.
Johnson & Johnson, 654 F. Supp. 568, 590 (S.D.N.Y. 1987); see
also Johnson & Johnson * Merck Consumer Pharmaceuticals Co.
v. Smithkline Beecham Corp., 960 F.2d 294, 299-300 (2d Cir.
1992); Pittsburgh Press Club v. United States, 579 F.2d 751,
759 (3d Cir. 1978); Weight Watchers Int’l, Inc. v. Stouffer
Corp., 744 F. Supp. 1259, 1272 (S.D.N.Y. 1990); Bruce P.
Keller, “A Survey of Survey Evidence,” in The Litigation
Manual 770 (John G. Koeltl & John S. Kiernan eds. 1999); 6
Business and Commercial Litigation in Federal Courts § 75:55,
p. 1027 (Robert L. Haig ed., 2d ed. 2005). That the questions
were drafted by the plaintiffs’ lawyer was apt to make
them leading, and did.
4 No. 07-3581
The key question—the meaning of “your original agree-
ment with the above mentioned creditor has been
revoked”—was rephrased as follows, with a choice of
possible answers:
If a debt collector sent you a letter stating that your
agreement with the original creditor has been revoked,
what do you feel this statement means?
# There is no longer a contract between the
original creditor and me.
# I must pay the debt immediately.
# I do not have to pay the debt because the
creditor revoked the agreement.
# I am unsure as to what this means.
# Other.
The survey respondents should have been read (it was a
telephone survey) the actual wording of the letter. And
the suggested answers omitted the defendant’s reading,
adopted by the judge—that the recipient’s credit-card
privileges have been revoked. We add parenthetically
that a telephone survey is not an ideal method of testing
the understanding of a written statement, since inflection
can alter meaning and some written statements are
easier to understand when read than when heard.
The plaintiffs argue that only a lawyer could draft the
survey questions because a survey researcher would not
be familiar with the Fair Debt Collection Practices Act.
That is not correct. The questions designed to elicit a
consumer’s understanding of the meaning of the passage
No. 07-3581 5
that we quoted do not require any knowledge of the Act.
If they did, the proper response would be for the lawyer
to explain the relevant law to the survey researcher.
There is more that is wrong with the survey. There was
no control group—no group of survey respondents
shown a wording of the dunning letter that the plaintiffs
agreed would not be confusing or that simply omitted the
challenged sentence. As we explained in Johnson v.
Revenue Management Corp., 169 F.3d 1057, 1060 (7th Cir.
1999) (emphasis added), the plaintiff has “to show that
the additional language of the letters unacceptably
increases the level of confusion; many unsophisticated
consumers would be confused even if the letters they
received contained nothing more than a statement of the
debt and the statutory notice.” Cf. Phyllis J. Welter,
Trademark Surveys § 24.03[1][b], pp. 24-28.2 to 28.3 (1998).
The defendant, it is true, makes an unsound objection
to the survey—that instead of targeting unsophisticated
consumers it surveyed a random sample of consumers.
The average consumer is more sophisticated than the
unsophisticated consumer because the average is the
average of a group that contains sophisticated con-
sumers as well. Yet the law is primarily intended to pro-
tect the unsophisticated consumer, e.g., Taylor v. Cavalry
Investments, L.L.C., 365 F.3d 572, 574 (7th Cir. 2004); Russell
v. Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996), since the
sophisticated one can usually fend for himself (that is
what “sophistication” means in this context). So a better
survey would include questions designed to filter out the
sophisticated. But that is of no consequence in this case; a
6 No. 07-3581
defendant can only be helped by a survey that includes
responses from the sophisticated.
The plaintiffs’ lawyer made a damaging admission at
oral argument, but we will not hold him to it. He said
that without the survey he could not prove that his
clients are entitled to a positive amount of statutory
damages (he was not seeking actual damages). Not so.
In a suit under the Act other than a class action, the
amount of damages is “such . . . damages as the court may
allow,” 15 U.S.C. § 1692k(a)(2)(A), while in a class
action, which this case is, the class itself (which the judge
certified) is additionally entitled to an amount of
damages “not to exceed the lesser of $500,000 or 1 per
centum of the net worth of the debt collector,”
§ 1692k(a)(2)(B), plus attorneys’ fees, § 1692k(a)(3). The
Act directs the judge, in computing damages, to
consider, among other relevant factors—
(1) in any individual action under subsection (a)(2)(A)
of this section, the frequency and persistence of non-
compliance by the debt collector, the nature of such
noncompliance, and the extent to which such non-
compliance was intentional; or
(2) in any class action under subsection (a)(2)(B) of this
section, the frequency and persistence of noncompli-
ance by the debt collector, the nature of such noncom-
pliance, the resources of the debt collector, the
number of persons adversely affected, and the extent
to which the debt collector’s noncompliance was
intentional.
No. 07-3581 7
§ 1692k(b). With the possible exception of “the nature of
such noncompliance,” insofar as it refers to the gravity of
the violation, see Graziano v. Harrison, 950 F.2d 107, 114 (3d
Cir. 1991), or its blatancy, Crossley v. Lieberman, 868 F.2d
566, 572-73 (3d Cir. 1989); cf. Pipiles v. Credit Bureau of
Lockport, Inc., 886 F.2d 22, 28 (2d Cir. 1989)—though we
are unclear what as a practical matter these inquiries
would add to a determination of the “frequency and
persistence” of the unlawful activity—the factors listed in
the statute are independent of what a consumer survey
would show.
Not wanting their appeal to depend on the admissibility
of the survey, the plaintiffs argue that if a statement in a
dunning letter is false, the district judge need not find
that it would not mislead anyone, and that the state-
ment that the debtor’s agreement with the issuer of the
creditor has been “revoked” is false. Even if we accept
the premise, the conclusion would not follow. If the
average unsophisticated consumer would not be influ-
enced by a statement rightly or wrongly claimed to be
literally false, the case should end right there. Hahn v.
Triumph Partnerships LLC, 2009 WL 529562 (7th Cir. Feb. 12,
2009); Wahl v. Midland Credit Management, Inc., 2009 WL
426055 (7th Cir. Feb. 23, 2009). As we explained in Wahl,
at *2-3, the plaintiff “says she is not arguing that the
collection letters were ‘misleading’ or ‘deceptive,’ but
only that they were ‘false,’ and that the statute creates
an important distinction between these concepts. Where
a plaintiff alleges that a collection statement is false
(rather than deceptive or misleading), [the plaintiff]
contends, the only determination for the court is whether
8 No. 07-3581
the statement is in fact false . . . . That could not be further
from the truth . . . . If a statement would not mislead the
unsophisticated consumer, it does not violate the FDCPA—
even if it is false in some technical sense. For purposes of
§ 1692e, then, a statement isn’t ‘false’ unless it would
confuse the unsophisticated consumer.”
We had earlier pointed out that “there might also be a
case in which a false or deceptive statement clearly was
immaterial.” Evory v. RJM Acquisitions Funding L.L.C., 505
F.3d 769, 776-77 (7th Cir. 2007) (citations omitted); see also
Barnes v. Advanced Call Center Technologies, LLC, 493 F.3d
838, 839, 841 (7th Cir. 2007); Taylor v. Cavalry Investments,
L.L.C., supra, 365 F.3d at 574-75. The purpose of the Fair
Debt Collection Practices Act is to protect consumers, and
they don’t need protection against false statements that
are immaterial in the sense that they would not in-
fluence a consumer’s decision—in the present context
his decision to pay a debt in response to a dunning letter.
See Peters v. General Service Bureau, Inc., 277 F.3d 1051,
1056 (8th Cir. 2002).
The plaintiffs’ insistence on the “falsity” of the state-
ment in the letter about revocation is itself confusing,
because the truth or falsity of the statement depends in
the first instance on what it means. The defendant argues
that the statement (“Therefore, your original agreement
with the above mentioned creditor has been revoked”)
means simply that the debtor’s credit-card privileges
have been revoked because he didn’t pay his debt to the
issuer of the card. That is doubtless what it does mean, but
it could conceivably be misunderstood by an unsophisti-
No. 07-3581 9
cated consumer to mean that he has no contractual
protections against the issuer—perhaps the issuer can
now charge a higher interest rate on the unpaid balance
than the rate specified in the contract creating the credit
relationship. He might even we suppose think that the
opening word of the statement—“Therefore”—which
implies that the revocation is due to the failure to pay
the outstanding debt—implies that if he pays, his credit-
card privileges will be restored. A further possible con-
fusion, though one more likely to be noticed by and bother
a lawyer than a consumer, is that when a party is autho-
rized to terminate a contract and does the contract is not
said to be “revoked” by him but to be “rescinded,” or
terminated without liability; but neither of these things
seems to have happened in this case. The dunning letter
is trying to collect a debt resulting from the recipient’s
breach of his contract with the issuer of the credit card,
implying that the latter is seeking to enforce rather
than to rescind the contract.
But the plaintiffs had the burden of proving that the
statement was misleading and we must consider whether
they could prove that only by a survey, in which event the
exclusion of their survey rightly doomed their case.
When it is neither clear that a challenged statement is
misleading nor clear that it is not, the question whether it
is misleading is one of fact, e.g., Evory v. RJM Acquisitions
Funding L.L.C., supra, 505 F.3d at 776; Johnson v. Revenue
Management Corp., 169 F.3d 1057, 1059-61 (7th Cir. 1999);
Walker v. National Recovery, Inc., 200 F.3d 500, 501, 503-04
(7th Cir. 1999), and ordinarily, as these cases explain, the
best evidence is a responsible survey. But it is not the only
10 No. 07-3581
possible evidence. Durkin v. Equifax Check Services, Inc., 406
F.3d 410, 414-15 (7th Cir. 2005); Johnson v. Revenue Manage-
ment Corp., supra, 169 F.3d at 1060-61. Recipients of an
allegedly misleading dunning letter can testify that they
were misled, and if they are shown to be representative
unsophisticated (or, a fortiori, sophisticated) consumers, the
trier of fact may be able to infer from their testimony
that the letter is misleading within the meaning of the Fair
Debt Collection Practices Act. Evory v. RJM Acquisitions
Funding L.L.C., supra, 505 F.3d at 774; Chuway v. National
Action Financial Services, Inc., 362 F.3d 944, 948 (7th Cir.
2004).
The district judge excluded the survey, which was
correct, as we have explained; but he then terminated the
case on the ground not that the plaintiff had no other
evidence but that the meaning of “revoked” was unequivo-
cal and clear and could not mislead even an unsophisti-
cated consumer. But we have seen that this is not so. The
defendant’s letter was not so palpably misleading as to
entitle the plaintiffs to summary judgment, but neither
was it so palpably not misleading as to entitle the defen-
dant to summary judgment.
Were the plaintiffs seeking actual damages rather than
just statutory damages, they would have to present some
evidence that they were misled to their detriment. Bartlett
v. Heibl, 128 F.3d 497, 499 (7th Cir. 1997). Their only
evidence that anyone was misled is the survey, which
means they have no admissible evidence that they were
misled. But that is of no moment since they are seeking
only statutory damages. Id. In Bartlett we explained that
No. 07-3581 11
the inclusion of a confusing statement in a dunning letter
can violate the Act by distracting the reader from the
notice of his statutory rights, and that this is something
that a judge in a particular case may be able to determine
without evidence. Id. at 500-01.
This case is similar. We cannot understand the
function of the challenged sentence. The defendant unhelp-
fully explains that “stating that the mutuality of the
original agreement—the extension of a credit line in
exchange for repayments with interest—no longer exists
is an accurate summation of the situation when the col-
lection of the debt has been turned over to a collection
agency.” That may be true, but what has it to do with the
recipient’s obligation? If he is being dunned, it is because
he owes money to the issuer of the credit card, having
failed to respond to the issuer’s demand (“Previous
attempts have been made by our client to resolve this
debt voluntarily. As of this date, those attempts have not
been successful”). It’s as if the letter said, “you owe us
money, and by the way don’t try to charge anything
more on this credit card, because it’s been revoked.”
The second clause in our paraphrase is gratuitous and
confusing. Granted, “confusing” is not a statutory term;
the term is “false, deceptive, or misleading,” 15 U.S.C.
§ 1692e, and none of these is a synonym for “confusing.”
But the purpose of the statute is to prevent “abusive debt
collection practices,” 15 U.S.C. § 1692(e), and “false,
deceptive, or misleading” should be interpreted accord-
ingly. Confusing language in a dunning letter can have
an intimidating effect by making the recipient feel that he
12 No. 07-3581
is in over his head and had better pay up rather than
question the demand for payment. Cf. Swanson v. Southern
Oregon Credit Service, Inc., 869 F.2d 1222, 1226 (9th Cir.
1988) (per curiam). The intimidating effect may have
been magnified in this case by the reference to revoca-
tion, which might have suggested to an unsophisticated
consumer that any right he might have to challenge
the demand for payment had been extinguished by the
revocation of his contract with the issuer, the original
creditor.
But the broader point is that the debt collector must not
obscure (or, as the cases often say, “overshadow”) the
statutorily required validation notice (“Unless you notify
this office within 30 days after receiving this notice
that you dispute the validity of this debt or any portion
thereof, this office will assume this debt is valid”). E.g.,
McKinney v. Cadleway Properties, Inc., 548 F.3d 496, 502-03
(7th Cir. 2008); McMillan v. Collection Professionals, Inc., 455
F.3d 754, 758-59 (7th Cir. 2006); Sims v. GC Services L.P., 445
F.3d 959, 963-65 (7th Cir. 2006); Olson v. Risk Management
Alternatives, Inc., 366 F.3d 509, 512-13 (7th Cir. 2004);
Bartlett v. Heibl, supra, 128 F.3d at 500; Russell v. Equifax
A.R.S., supra, 74 F.3d at 32-35; Swanson v. Southern Oregon
Credit Service, Inc., supra, 869 F.2d at 1224-26; see 15
U.S.C. § 1692g. He must not make the unsophisticated
consumer “uncertain as to her rights.” Russell v. Equifax
A.R.S., supra, 74 F.3d at 35.
Yet we do not think that the present case is so clear as
to entitle the plaintiffs to summary judgment. Unlike
previous cases, the confusing statement did not appear
No. 07-3581 13
in or adjacent to the notice of the plaintiffs’ right to chal-
lenge the debt, and it was not, as in most of those cases,
a flat-out contradiction of anything in the letter, though
this depends on just what an unsophisticated consumer
would understand it to mean. The focus in the district
court, moreover, was on the survey evidence and on
whether the challenged sentence in the defendant’s
letter was literally false. With those issues out of the
way, the district judge and the parties can focus on the
critical issue, which is that of confusion. Perhaps the
defendant can explain why the sentence was included
and justify the inclusion. He should be asked to do so,
because there is enough indication of confusion to place
a burden of production on the defendant.
The grant of summary judgment in favor of the defen-
dant (and the dismissal of the suit, based upon that grant)
was premature and is therefore reversed, and the case is
remanded to the district court for further proceedings
consistent with this opinion.
A FFIRMED IN P ART, R EVERSED IN P ART,
AND R EMANDED .
3-10-09