In what may be the most closely parsed sentence in any collection letter ever, a District Court judge in New York has partially granted and partially denied a defendant’s motion to dismiss after it was sued for sending a collection letter that included the statement, “Synchrony Bank may continue to add interest and fees as provided in your agreement.”
A copy of the ruling in Ortiz v. Advanced Call Center Technologies, LLC can be accessed by clicking here.
The plaintiff had an unpaid retail store credit card account that was placed with the defendant, which sent the letter. The plaintiff alleged five ways in which the letter violated the FDCPA, four of which have to do with the sentence in question. The plaintiff also alleged the letter, in and of itself, violated the FDCPA. The judge dismissed the first two claims, but denied the motion to dismiss on the remaining claims.
The plaintiff claimed the letter violated the FDCPA in failing to adequately state the amount owed because it did not indicate whether interest and fees were accruing on the account. That claim was dismissed because there is nothing in the FDCPA that requires such a disclosure.
Next, the plaintiff claimed that if interest and fees were accruing, saying that those additional charges “may” continue to add interest and fees was misleading because it left open the possibility that the fees might not be added. This claim was also dismissed under the safe harbor provided by Avila v. Riexinger & Associates.
This is where the case turns in favor of the plaintiff. The plaintiff next alleged that if interest and fees were not accruing, using the word “may” was deceptive because it implied that they could be added. The motion to dismiss this claim was denied because a letter that misconstrues whether interest or fees are accruing could be misleading to a least sophisticated consumer.
Next, the plaintiff claimed using the word “and” between interest and fees was a violation of the FDCPA because it would be misleading if only one or the other was accruing and not both. The judge ruled, such as with the third claim, that this claim could not be disposed of in a motion to dismiss and must await a motion for summary judgment.
Finally, the plaintiff claimed the whole letter was deceptive and misleading because it implies that paying the “amount currently due” prevents additional fees and interest from accruing.
“The letter informs Ortiz that [the defendant] will ‘stop [its] collection activity’ if ‘the Amount Currently Due is paid,” Judge Frederic Bloc of the District Court for the Eastern District of New York wrote. ” ‘Collection activity’ is not a self-evident concept. Perhaps its most natural meaning refers to sending collection letters and the like, but the Court cannot rule out the possibility that the least-sophisticated consumer would understand it to include the imposition and collection of interest and fees.”