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EDNY Judge Dismisses FDCPA Suit After Borrower Admits Late Fees Were Possible

The truth, at least from the plaintiff in this particular case, set the defendant free. A District Court judge in New York has granted a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act for including language about the amount owed possibly increasing due to additional fees and charges accruing on the account when the plaintiff admitted that such an event could theoretically occur.

A copy of the ruling in the case of Coleman v. Alltran Education, Inc., can be accessed by clicking here.

The plaintiff filed suit after receiving a collection letter from the defendant that included the following statement: “As of the date of this letter, you owe the total balance due reflected above. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater.” The plaintiff argued that a least sophisticated consumer would infer that the balance owed could increase even though the defendant was prohibited from assessing late charges.

The judge in this case, Judge Allyne Ross of the District Court for the Eastern District of New York, started to look at possible precedents — some of which conflicting with each other — before getting to the most important reason why she should grant the motion to dismiss.

“I need not reach this issue, however, because plaintiff has conceded that late charges could be assessed on his debt if his debt were rehabilitated and he failed to make timely payments on it thereafter,” Judge Ross wrote in her ruling. That made this case different from the others she was considering — Avila v. Reliant Capital Solutions, LLC and Boucher v. Finance System of Green Bay, Inc. — because late charges were impossible in those cases. “Because late charges could conceivably be assessed, Alltran’s ‘letter was not inaccurate’ ” and Judge Ross dismissed the case.

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