## Facts

- Michael and Peggy Bingham incurred a hospital debt arising from medical services for family purposes.
- The hospital referred the account to Collection Bureau, Inc. (CBInc), a debt collector under the FDCPA.
- CBInc sent collection letters and made about 14 telephone calls over roughly 30 days seeking payment.
- During calls, CBInc representatives asked personal and financial questions and discussed possible garnishment or attachment if the debt remained unpaid.
- The Binghams alleged CBInc failed to provide the required written validation notice, sought unauthorized interest, harassed them by repeated calls, and made false or threatening statements (including threats of imprisonment, legal action, and garnishment), and used deceptively similar corporate names.
- The Binghams also sued Collection Bureau of North Dakota, Ltd. (CBLtd), an affiliated entity that sent standardized collection notices, alleging deceptive notices and unlawful “flat rating.”
- The case was tried to the court in a federal bench trial under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq.

## Issues

1. What consumer-protection standard governs whether collection communications are oppressive, misleading, or threatening under the FDCPA.
2. Whether CBInc’s call frequency and conduct constituted harassment or abuse under 15 U.S.C. § 1692d(5).
3. Whether CBInc violated 15 U.S.C. §§ 1692e and 1692f by making false or misleading threats of legal process, and by attempting to collect amounts not authorized by agreement or law.
4. Whether CBInc violated 15 U.S.C. § 1692g by failing to provide a timely written validation notice.
5. Whether CBLtd’s notice program violated 15 U.S.C. § 1692e or constituted “flat rating” prohibited by 15 U.S.C. § 1692j.

## Decision

- The court applied a protective standard focused on how debtors “on the low side of reasonable capacity” would understand the challenged communications.
- CBInc did not violate § 1692d(5) based solely on approximately 14 calls in one month at generally reasonable times, absent sufficient proof of intent to annoy, abuse, or harass.
- The court found CBInc liable for failing to provide the written validation notice required by § 1692g.
- The court found CBInc liable under § 1692f(1) for demanding interest not authorized by the agreement creating the debt or otherwise permitted by law.
- The court found liability for certain false or misleading threats of legal action or legal process under § 1692e(5) (and related provisions) when the collector lacked intent or a lawful basis for the threatened action.
- The court rejected claims that CBInc violated § 1692e(4) or § 1692e(7) based on alleged threats of imprisonment or criminal accusations due to insufficient proof.
- The court rejected the contention that CBLtd engaged in prohibited flat rating under § 1692j and rejected, on the record presented, the claim that its form notices were deceptive under § 1692e.
- Judgment was entered for plaintiffs on the established CBInc violations and for defendants on the remaining claims; statutory damages were awarded under 15 U.S.C. § 1692k.

## Legal Principles

- FDCPA communications are evaluated from the standpoint of consumers with low but reasonable capacity, not an “ordinary reasonable person,” when assessing perceived oppression, falsehood, or threat.
- Under § 1692d(5), call frequency is relevant but not dispositive; liability requires evidence that calls were made repeatedly or continuously with intent to annoy, abuse, or harass.
- Under § 1692e(5), a debt collector may not threaten action that is not intended to be taken or is not legally permissible; threats may be unlawful when presented as definite or imminent to a vulnerable consumer.
- Under § 1692f(1), a collector may not seek interest or other amounts unless expressly authorized by the agreement creating the debt or permitted by law.
- Under § 1692g, a collector must provide a compliant written validation notice within five days of the initial communication (unless included in the initial written communication); failure is an independent statutory violation.
- “Flat rating” under § 1692j targets sham involvement where an agency merely sells its name or letterhead; meaningful participation in collection activity defeats a flat-rating claim on those facts.

## Conclusion

The court held that CBInc violated the FDCPA by omitting the required validation notice, seeking unauthorized interest, and making certain improper threats of legal process, while rejecting harassment and imprisonment/crime-threat claims; it also rejected allegations that the affiliated notice-sending entity engaged in deceptive flat rating.


Bingham v. Collection Bureau, Inc., 505 F. Supp. 864 (D.N.D. 1981)