A District Court judge in Pennsylvania has awarded summary judgment to a plaintiff and certified her suit as a class action after she alleged a collection agency violated the Fair Debt Collection Practices Act by not being clear enough in a collection letter.
A copy of the ruling in Knight v. Midland Credit Management can be accessed by clicking here.
The plaintiff received a collection letter in relation to an unpaid credit card debt that had been purchased by the defendant. The letter read:
Did you forget something?
We can’t change the past, but we can help with your future.
Reneisha L Branch, mistakes can happen to anyone. Midland Credit Management believes that everyone deserves a second chance. Call (800) 282-2644 or visit us online at www.midlandcreditonline.com by 08-19-2016 to accept one of these discounts.
We are offering you 40% OFF your balance to help you eliminate your debt while saving money.
Midland Credit Management will help you put this debt burden behind you. Call us today to pay off your account, and regain your financial free-dom!
After receiving your final payment, we will consider the account paid*.
* If you pay your full balance, we will report your account as Paid in Full. If you pay less than your full balance, we will report your account as Paid in Full for less than the full balance.
The defendant also offered three payment options: (1) 40% Off, Payment Due Date: X-XX-XXXX; (2) 20% OFF, Over 6 months; (3) Monthly Payments As Low As: $50 per month.
The plaintiff alleged the letter violated Sections 1692e and 1692f of the FDCPA because of the offer to “report” payment of the debt, and did not adequately explain the difference between “paid in full” and “paid in full for less than the full balance.”
The defendant also filed for summary judgment, arguing the letter was not confusing and did not contain false or deceptive language. As well, the statement, “We can’t change the past, but we can help with your future,” was not an offer of credit reporting benefits.
Because the word “report” could mean the payment was reported to a credit bureau or reported to the original creditor, the letter violates Section 1692e, Judge Mark Kearney of the District Court for the Eastern District of Pennsylvania, wrote.
“Since the least sophisticated debtor could reasonably interpret ‘report’ in multiple ways, at least one of which is inaccurate, we find the word ‘report’ in the letter deceptive,” Judge Kearney wrote. “We also find the term material. The least sophisticated debtor may decide not to pay if she thinks Midland Credit will only report to the original creditor.”
Because there was some ambiguity in relation to when the defendant would report the account as paid in full and when it report it was paid in full for less than the full balance, the letter is a violation of Section 1692e, Judge Kearney ruled.