Who is the Least Sophisticated Consumer and what are the limits of what he or she knows? That question has been asked time and again of judges across the country, as they rule on lawsuits alleging violations of the Fair Debt Collection Practices Act. Judges are asked to interpret whether this anonymous individual — the Least Sophisticated Consumer — would know or understand something when it comes to receiving a collection letter or communication from a debt collector.
A federal judge for the Eastern District of New York opted last week to give the Least Sophisticated Consumer a higher IQ than some of his comrades on the bench, and gave a boost to a collection agency that obviously made a mistake that was not intended to be a violation of the FDCPA.
The judge, Joseph Bianco, denied a summary judgment motion in favor of a pair of plaintiffs in a class-action lawsuit against a collection agency that was accused of sending collection letters where the amount owed was actually double the amount of the debt. The plaintiffs also alleged that the defendant violated the FDCPA by falsely implying it had the right to collect interest and fees on the debt, but the judge did not rule on that cause of action.
The duplicate information was provided by the original creditor — a healthcare organization — when it sent a spreadsheet to the defendant. The defendant sent one collection letter to both of the named plaintiffs in August 2015 with the correct amounts and then sent another letter a month later which included a second line item, for services rendered on 00/00/00 for the same amount of the original debt. Anyone, including a least sophisticated consumer, would be able to understand that this was an accident and not an attempt to collect twice as much as was due, Judge Bianco said.
For the ARM industry, seeing a ruling like this is hopefully refreshing and proof that there are judges out there who understand that collection agencies make mistakes, and every mistake does not rise to the level of being an FDCPA violation. In the footnotes, Judge Bianco noted that of the 12,550 possible members of the class who received letters where the amount owed was twice as much as the actual debt, not one of them overpaid. In fact, the defendant was “unable to determine whether any putative class members had made an inquiry regarding an at-issue letter.”
Let’s let Judge Bianco have the last word.
Here, the Court concludes that even the least sophisticated consumer—who is presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care—would not be misled by the September 2015 letters. The fact that the second charges are for the same amounts and account numbers as the first charges makes clear that they are duplicative. Further, the “00/00/00” service dates for the repetitive charges would indicate to even the least sophisticated consumer that those charges were included in error.