Quick Collect Inc., a collection agency in Portland, Ore., did not violate the Fair Debt Collection Practices Act (FDCPA) while trying to collect from a consumer, a U.S. Court of Appeals ruled this week. The decision upheld an opinion issued by a U.S. District Court judge in Washington.
In Donohue v. Quick Collect Inc., the U.S. Court of Appeals for the Ninth District interpreted two sections of the FDCPA and held that no violations occurred because original payment terms between the consumer, Debbie Donohue, and her dental practice, Children's Choice, did not constitute a forbearance agreement under Washington State law.
Donohue filed a class-action lawsuit in April 2008 asserting that Quick Collect violated FDCPA rules prohibiting "[t]he false representation of…the character, amount or legal status of any debt" and another that bans collectors from using "unfair or unconscionable means to collect or attempt to collect any debt." The relevant question in examining both sections of the FDCPA was whether "the least sophisticated debtor would likely be misled by a communication."
The origins of the case began in October 2007 when Children's Choice assigned Donohue's principal and finance charges to Quick Collect, which then mailed a formal demand letter to Donohue seeking $270.99 in principal, $24.07 in assigned interest, and $2.23 in post assigned interest. Quick Collect did not immediately receive a response from Donohue and referred the matter to attorney Gregory Nielson to begin litigation to collect the amounts due.