Judge Grants Motion to Dismiss FDCPA Suit Over Lack of Interest Disclosure in Letter

A District Court judge in Wisconsin has granted a defendant’s motion to dismiss a class-action lawsuit after it was accused of violating the Fair Debt Collection Practices Act by sending a letter to an individual in which it failed to disclose the amount owed may increase due to interest accrual.

A copy of the ruling in Bazile v. Finance System of Green Bay can be accessed by clicking here.

The plaintiff received a collection letter from the defendant in reference to an unpaid medical debt. The plaintiff subsequently filed a suit, alleging the letter violated Sections 1692e(2), 1692e(5), 1602e(10), and 1692g(a)(1) of the FDCPA because it “does not disclose that the amount of the debt may increase due to the accrual of interest” and “fails to disclose the amount of the debt as required by the FDCPA.”

As the judge notes in his ruling, “the FDCPA does not require the debt collector to state whether or not the debt accrues interest.” Because the defendant’s letter referenced the “Total Balance” that was owed, that is sufficient to comply with the FCPA. Courts in the Seventh Circuit have “suggested that regardless of whether interest is accruing, as long as the debt collectors set out a specific amount of the debt, they have complied with the FDCPA,” Judge William Griesbach wrote in his ruling.

“Regardless of whether interest is or is not accruing, the letter does not violate the FDCPA,” Judge Griesbach wrote. “As noted above, the FDCPA does not require that the debt collector tell the debtor whether the balance is or is not accruing interest or late fees. While doing so might be consistent with the Congressional purpose underlying the FDCPA, Congress did not require that debt collectors include that information along with the other specific disclosures it directed them to make in their initial communication with the debtor, though it could easily have done so. Congress was certainly aware that creditors charge interest. For a court to add such a requirement by way of statutory construction and thereby subject debt collectors to multiple FDCPA lawsuits by debtors hardly seems fair and reasonable.”

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