Background of the case

The Reitz VS Credit Systems of Fox Valley Incorporated case was out of the Eastern District of Wisconsin. Robert Reitz, Douglas Pundsack and Julie Roellchen who are the plaintiffs, sued Credit Systems in February 2020, because of a collection letter they received which stated the following,

“This account has been listed with our office for collection. The entire balance is due and payable to our office. Avoid errors and protect your credit record.”

This disclaimer was on the notice Reitz received, and because of this disclaimer, Reitz sued Credit Systems; they had good reason to do so as well. The plaintiff alleged that this violated Section 1692e and 1692f of the FDCPA, also known as the Fair Debt Collection Practices Act.

Section 1692e of the FDCPA mentions the following,

“A debt collector may not use any false, deceptive or misleading representation or means in connection with the collection of any debt.

Section 1692f of the FDCPA mentions the following,

“A debt collector may not use unfair or unconscionable means to collect or attempt to collect the debt.”

This is where the least sophisticated argument comes into play in relation to that disclaimer. The debts, in question, were small medical debts owed to healthcare providers. The plaintiff has to legally provide a statement in order to explain the wrongdoing of the defendant, when and where the inaction was caused as well as if any damages were incurred.

Least sophisticated consumer – why was it suable?

The plaintiff is arguing, that the statement implies to the least sophisticated consumer, that if the debt is not paid promptly, the debt collector or Credit Systems in this case, would report the debt to the Consumer Reporting Agencies (CRAs).

The defendant is arguing that the letter just basically urges the debtor to pay the debt, avoid errors and protect their credit record. They deny that the letter “contains any threat, express or implied…” The defendant, on their part, did not have any intention to report the debtor to a CRA and the letter does not state otherwise.

The ‘avoid errors’ implies that multiple mistakes could be made voluntarily or involuntarily due to non-payment in full. Is the debtor in the habit of making errors? Is the debtor in the habit of causing problems? Is the debtor in the habit of making mistakes? The ‘avoid errors’ part of the letter could not have been included.

Although the letter does not mention the debt amount to be paid, it also does not give room for negotiations or for any payment plan to be discussed. In a way, it implies that if the debt is not paid in full, errors could appear in the debtor’s credit report. Unsophisticated consumers usually assume that small non-recurring debts will not make a difference in the credit reports. This is untrue, as they do have an impact on the credit reports.

Therefore, this fails the least sophisticated consumer test.

Court’s decision

The court says that a collection letter must be comprehensible and clear to an individual who is uninformed, naïve and trusting but without rudimentary knowledge about the financial world or incapable of making basic deductions and interferences.

Credit Systems had applied for a motion to dismiss, which the court denied. Although the letter was proven to be ‘literally correct’, the court maintained while the debt collector is correct that the letter does not make an expressed threat to report the debt to a credit reporting agency if it is not promptly paid, the court could not dismiss the FDCPA action because it was least plausible that a significant fraction of debtors could be misled by this communication; the court could not let it go because the way the disclaimer sits, it is misleading. Hence, the court reaffirmed the significance of the least sophisticated consumer standard which does apply here.

This proves that although the wordings can be correct, they can also be misleading which directly violates the Fair Debt Collection Practices Art.

Where to go from here?


As a results, loan servicers such as Credit Systems have to tighten their wording on such notices and letters. the consumer can look for this type of language on collection notices as to have a case of deletion.

‘Avoid errors’ can be reported on a credit report but to avoid errors by making full payment will not sit easily with everyone.

How can Clayton Wesley help?


Clayton Wesley, in the dispute process, looks for this type of language on collection notices. There might be a good case for deletion by referencing this case, and the court deciding that this type of language is misleading and does in fact, violate the FDCPA. There is a good argument here to get some of these accounts deleted with that type of wording or similar wording to that.