Judge Denies MTD Over Inclusion of ‘Fees’ and ‘Charges’ in Letter When They Didn’t Affect Balance

A District Court judge in Indiana has denied a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act by including line items for “interest” and other “charges” even though the amounts were zero and no such fees could be added to the balance.

A copy of the ruling in Driver v. LJ Ross & Associates Inc., can be accessed by clicking here.

The plaintiff received a collection letter regarding an unpaid utility bill. The letter included a line-item summary of the amount that was owed. There were line items for “interest” and “charges” but both amounts were $0.00. Because the defendant was not allowed to charge interest or other fees, the plaintiff filed suit, alleging the letter violated Sections 1692e(2), 1692e(10) and 1692f of the FDCPA by mis-stating the amount that was owed.

The defendant attempted to argue that the plaintiff could not be confused about whether those fees might be added to the account later because they were listed as $0.00 in the collection letter and there was nothing else in the letter that implied that would change in the future.

But because the defendant was not allowed to charge interest or add other fees to the balance that was owed, by listing them on the letter, “it is reasonable for the letter to be read to imply that these charges could begin to accrue if Driver did not pay the debt,” wrote Judge Matthew Brookman of the District Court for the Southern District of Indiana, Evansville Division in denying the motion to dismiss.

The defendant attempted to argue it was stuck between a rock and a hard place because had it just listed the amount owed, it could be accused of being misleading, just as it is being accused of being misleading by being more specific and breaking out each potential contributor to the total balance that was owed.

But Judge Brookman disagreed.

“Both Driver’s complaint and Defendant’s motion illustrate that the subject debt was static,” he wrote. “Thus, Defendant only intended to collect the principal amount and there was no need to itemize interest and other charges as they were currently $0.00 with no chance of increasing in the future. If the debt was dynamic or subject to further interest or other charges, then LJ Ross’s argument regarding the safe harbor language provided by the Seventh Circuit would carry the day. Given these facts and at the pleading stage, it does not.”

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