FDCPA – 11TH Circuit: Kinlock v. Wells Fargo Bank – Post-Foreclosure Offers of Financial Assistance to Defaulted Borrower Not Violative of FDCPA/Florida Consumer Collection Protection Act
A mortgage servicer’s offer of financial assistance to a defaulted borrower in order to induce him to vacate his property following foreclosure does not present a plausible claim under the FDCPA or its Florida equivalent.
In Kinlock v. Wells Fargo Bank, N.A., No. 15-12867 (11th Cir. Feb. 26, 2016), a defaulted borrower sued his mortgage loan servicer for violations of the federal Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act when, following foreclosure and a sale of his residence, the servicer left a letter in the borrower’s mailbox offering financial assistance if he would vacate the property. The next day the servicer posted the letter on the front door, and sent the letter the next day via registered mail.
The Eleventh Circuit affirmed the district court’s dismissal, with prejudice, of the pro se amended complaint and held that these actions by the servicer did not constitute actions in connection with the collection of a debt. The Court focused on prohibitions under both acts deemed “communications” regarding a “debt” by a “debt collector,” and determined that neither act applied because the borrower “did not allege that anyone ever asked him for payment for a debt, or told him he had an obligation to pay [the servicer] for a debt.” The FDCPA prevents debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” The Court concluded that the servicer’s offer letter did not demand payment or mention additional fees that would be owed if payment was not tendered. The Court noted that a demand for payment “need not be express to fall under the protections of the FDCPA, [yet] the facts alleged show no demand of any sort.”