A District Court judge in New Jersey has denied a collection agency’s motion to dismiss a lawsuit and granted the plaintiff’s motion to certify the suit as a class action, which alleges the collection agency violated the Fair Debt Collection Practices Act by referencing in a collection letter that late charges may be added to her federal student loan, which is not allowed.
A copy of the ruling in Hovermale v. Immediate Credit Recovery can be accessed by clicking here.
The plaintiff defaulted on her federal Perkins loan, and the university placed the amount with the defendant for collections. The defendant sent a letter in February 2015 to the plaintiff that included the following passage:
Due to interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Therefore, if you pay the amount shown above, an adjustment may be necessary.
In filing the suit, the plaintiff alleged the defendant violated Section 1692e of the FDCPA, which prohibits any false, deceptive, or misleading representation or means in connection with the collection of any debt, and Section 1692g of the FDCPA.
The defendant argued that the plaintiff lacked standing to sue because she suffered no actual damage as a result of the language in the letter, but Judge Robert Kugler ruled the letter violated the plaintiff’s right to “receive truthful, non-misleading, and non-deceptive information” from the defendant.
The defendant’s “opposition falls flat,” Judge Kugler wrote. “ICR focuses on non-binding, out-of-circuit caselaw in arguing that Hovermale lacks a concrete injury.”
After denying the defendant’s motion to dismiss, Judge Kugler turned to the motion to certify the suit as a class action.
The plaintiff pointed to evidence to suggest that the defendant mailed out nearly 3,000 letters that included the passage in question, while the defense countered that only 207 letters were mailed. Judge Kugler granted the motion to certify, determining that all four requirements under Rule 23(a) were met by the plaintiff’s arguments.