In Scheffler v. Gurstel Chargo, P.A., the U.S. Court of Appeals for the Eighth Circuit rejected a career plaintiff’s attempts to manufacture a Fair Debt Collection Practices Act (FDCPA) claim by baiting a debt collector into discussing the underlying debt following a cease-communications request. Attempts by career plaintiffs and others to bait creditors and debt collectors into unlawful conduct have become increasingly common. While we regularly work with our clients to make sure they are fully prepared to rebut such attempts, creditors and debt collectors should take note that, as this decision illustrates, scurrilous claims of this nature can be successfully defended in litigation.

The plaintiff, Troy Scheffler, is a former debt collector who has spent the last decade regularly litigating FDCPA claims against other debt collectors. In August 2015, he received a garnishment notice from Gurstel, attempting to collect on a 2009 judgment against him. The notice contained a phone number and an invitation to contact Gurstel with any questions. Scheffler called the number, spoke to a collection representative about the underlying debt, and discussed the possibility of settling the debt. Thereafter, Scheffler filed a complaint alleging that Gurstel violated the FDCPA, 15 U.S.C. § 1692c(c), both in sending the garnishment notice and by discussing the debt after having received a cease-and-desist letter from Scheffler.

The district court granted Gurstel’s motion for summary judgment, finding no violation in sending the garnishment notice and characterizing Scheffler’s consumer-initiated inquiry as "an unsubtle and ultimately unsuccessful attempt to provoke [the defendant] into committing an FDCPA violation." The district court cited Eighth Circuit precedent providing that sending a garnishment notice did not violate the FDCPA, and further reasoned that the plaintiff’s conduct and dealings with Gurstel constituted a knowing and voluntary waiver of his cease-and-desist letter.

The Eighth Circuit affirmed both the district court’s ruling and reasoning, noting that it was the plaintiff who voluntarily reached out to the defendant, and that the discussion of the underlying debt happened in response to the plaintiff’s questions about his options with respect to the debt. According to the Eighth Circuit, Gurstel’s representative "fairly answered Scheffler’s questions by stating that Gurstel was willing to settle the debt and asking if Scheffler was interested in doing so. At no point did [Gurstel’s representative] pressure or badger Scheffler in any way."

In so ruling, the Eighth Circuit has joined with the Ninth Circuit in finding "that § 1692c(c) does not prevent a debt collector from responding to a debtor’s post-cease letter inquiry regarding a debt." See Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1171 (9th Cir. 2006). While the Eighth Circuit’s analysis in Scheffler is highly fact-specific, it demonstrates an increasing willingness by courts to scrupulously examine plaintiffs’ conduct when determining the existence of FDCPA violations.

Attorneys in Ballard Spahr's Consumer Financial Services Group regularly advise clients on compliance with the FDCPA and state debt collection laws and defend clients in FDCPA lawsuits and enforcement matters. The Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance.


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