308 F.

3d 188

Carmen McSTAY, on behalf of herself and all others similarly

situated, Plaintiff-Appellant,
v.
I.C. SYSTEM, INC., Defendant-Appellee.
Docket No. 01-9392.

United States Court of Appeals, Second Circuit.

Argued September 19, 2002.
Decided October 16, 2002.

Adam J. Fishbein, Cedarhurst, NY, for Plaintiff-Appellant, on submission.

Kenneth A. Elan, Law Offices of Kenneth A. Elan, New York, NY, for
Defendant-Appellee.
Before: FEINBERG, CABRANES and MAGILL,* Circuit Judges.
FEINBERG, Circuit Judge.

Plaintiff Carmen McStay appeals from the grant of summary judgment by the
United States District Court for the Southern District of New York (Carter, J.)
to defendant I.C. System, Inc. in plaintiff's putative class action alleging
violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq.
(FDCPA). McStay v. I.C. System, Inc., 174 F.Supp.2d 42 (S.D.N.Y.2001). For
the reasons stated below, we affirm.

Background
2

Defendant I.C. System, Inc. is a "debt collector" within the meaning of the
FDCPA. McStay brought suit alleging that three collection letters she received
from I.C. System violated the FDCPA's provisions requiring debt collectors to
notify debtors of their right to dispute the alleged debt, 15 U.S.C. 1692g, and
prohibiting collectors from using false or misleading means to collect a debt, 15
U.S.C. 1692e. McStay also alleged that I.C. System committed common law
fraud. On appeal, McStay has pursued only the claim arising under Section
1692g, which involves the first of the three letters noted above.

In that letter, dated February 22, 2000, I.C. System notified McStay that her
delinquent account with Dr. Jonathan A. Rhodes had been assigned to it for
collection. The first two paragraphs of the letter read:

Your delinquent account has been turned over to this collection agency and the
balance is due.

Please be advised that if after 30 days your account is not paid in full or
otherwise closed, the account information will be forwarded to the National
Credit Reporting Agencies. This may hinder your ability to obtain credit in the
future.

At the bottom of the front page, but before the signature line, the letter read,
"NOTICE: SEE REVERSE SIDE FOR IMPORTANT INFORMATION." The
reverse side contained, in larger size print than the front of the letter, the
following language, known as the "validation notice":

IMPORTANT INFORMATION
7

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 after
receiving this notice that the debt or any portion thereof is disputed, this office
will: obtain verification of the debt (or obtain a copy of a judgment, if there is
one) 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 different from
the current creditor.

In the district court, McStay conceded that the language of the validation notice
on the back of the letter complied with the relevant provisions of the FDCPA.
However, she argued that I.C. System nonetheless violated Section 1692g
because the language on the front of the letter was confusing and
overshadowed the statutorily required statement of the debtor's rights.
Specifically, McStay argued that despite the debtor's clear right to dispute the
debt within thirty days of receiving notice, 15 U.S.C. 1692g(b), the front of
the letter did not specify whether the thirty-day period would run from the date
printed on the letter (February 22, 2000) or from the date when McStay
received it (some days later). She claimed that because a specific date appeared
on the front of the letter and because the "thirty days" language was
ambiguous, a debtor could easily be confused as to when her rights would begin

and end. The district court disagreed, holding,

9

No consumer, not even the least sophisticated in the court's view, would readily
construe the notices on the front and back of the February letter together so as
to conclude that he had thirty days from the date of the letter as opposed to
from receipt in which to dispute the debt.

10

174 F.Supp.2d at 46.

Discussion
11

When a third-party debt collection agency like I.C. System collects on

consumer debt, the FDCPA requires it to send the debtor a detailed validation
notice within five days of the initial communication. 15 U.S.C. 1692g(a). We
have held that even if the debt collector's notice contains all the information
required by statute,1 it will still violate Section 1692g if the letter also "contains
language that `overshadows or contradicts' other language informing a
consumer of her rights." Russell v. Equifax A.R.S., 74 F.3d 30, 34 (2d
Cir.1996). Thereafter, we held in Savino v. Computer Credit, Inc., 164 F.3d 81
(2d Cir.1998), that "[w]hen determining whether Section 1692g has been
violated, courts use an objective standard, measured by how the `least
sophisticated consumer' would interpret the notice received from the debt
collector." Id. at 85 (internal quotation marks omitted). Therefore, a debt
collector's notice will violate Section 1692g if it fails to convey the required
information "clearly and effectively and thereby makes the least sophisticated
consumer uncertain as to her rights." Id.; see also DeSantis v. Computer Credit,
Inc., 269 F.3d 159, 161 (2d Cir.2001) ("Even if a debt collector conveys the
required information, the collector nonetheless violates the [FDCPA} if it
conveys that information in a confusing or contradictory fashion so as to cloud
the required message with uncertainty."). However, this Court has also made
clear that "in crafting a norm that protects the naive and the credulous the
courts have carefully preserved the concept of reasonableness." Clomon v.
Jackson, 988 F.2d 1314, 1319 (2d Cir.1993).

12

McStay does not dispute that the February 22 letter contained all the
information specifically required by Section 1692g. The sole Section 1692g
issue McStay argued before the district court was that the ambiguity in the
February 22 letter as to when the thirty-day period to dispute the debt would
begin to run was sufficiently confusing and/or contradictory to violate the
FDCPA.

13

We agree with the district court and indeed I.C. System so concedes that

13

We agree with the district court and indeed I.C. System so concedes that
the message on the front of the letter is ambiguous. However, just seven lines
below the ambiguous statement is another statement, printed in bold and all
capital letters, referring the reader to the reverse side for important information.
The reverse side contains only the addresses to which payment can be made and
the validation notice, in larger print than the front, clearly stating three times
that the thirty-day time period begins "after receiving this notice." Thus, any
confusion created by the ambiguity on the front of the letter dissipates when
read in conjunction with the language on the back. In short, we agree with the
district court that "the least sophisticated consumer is not liable to conclude that
the thirty-day period commenced on the date the ... letter was written as
opposed to received." 174 F.Supp.2d at 46-47.

14

McStay argues that in order to comply with the FDCPA, I.C. System should
have made meaningful disclosure of the debtor's rights on the front side of the
February 22 letter. While we have not found any case in this circuit directly
holding that a debt collector may print the validation notice on the back of a
collection letter, we have apparently presumed that such a letter should be read
in its entirety. Cf. Russell, 74 F.3d at 34 (agreeing with defendant that "the back
of the notice provided plaintiff with all the information necessary to contest the
claim," but finding validation language overshadowed by statements on front of
letter); DeSantis, 269 F.3d at 160-161 (recognizing validation notice on reverse
side of letter, but finding violation of FDCPA on other grounds). In Savino, we
found a violation of the FDCPA "because the language on the front of the
notice, when read in conjunction with the statutory debt validation on the
reverse side, would `make the least sophisticated consumer uncertain as to her
rights.'" 164 F.3d at 85 (internal citation omitted) (emphasis added). By
contrast, when the letter here is read in its entirety, it contains no contradiction
and creates no reasonable confusion as to when the thirty-day time period
commenced. Thus, we hold that when a prominent instruction in the body of
the letter warns that there is important information on the reverse side, a
reasonable reader, even if unsophisticated, would turn the paper over and read
the back. So long as nothing on the front of the letter overshadows or
contradicts the validation notice, the FDCPA does not require the notice to be
printed on the front.

15

McStay raises another argument for the first time on appeal. She argues that
I.C. System's threat to report her debt to the National Credit Reporting Agencies
after thirty days if the account was "not paid in full or otherwise closed,"
particularly when coupled with the observation that "[t]his may hinder your
ability to obtain credit in the future," overshadows and contradicts the
validation notice containing the debtor's rights. While we believe this argument
is a significant one, we decline to consider the issue as it was not raised below.

Caiola v. Citibank, N.A., 295 F.3d 312, 327 (2d Cir.2002); First City, Texas
Houston, N.A. v. Rafidain Bank, 281 F.3d 48, 52-53 (2d Cir.2002).
16

Judgment affirmed.

Notes:
*

The Honorable Frank J. Magill, of the United States Court of Appeals for the
Eighth Circuit, sitting by designation

At a minimum, the debt collector must clearly communicate to the debtor

certain information, including:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the
notice, disputes the validity of the debt, or any portion thereof, the debt will be
assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within
the thirty-day period that the debt, or any portion thereof, is disputed, the debt
collector will obtain verification of the debt or a copy of a judgment against the
consumer and a copy of such verification or judgment will be mailed to the
consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day
period, the debt collector will provide the consumer with the name and address
of the original creditor, if different from the current creditor.
15 U.S.C. 1692g(a).