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Judge Grants MSJ in FDCPA Case Over ‘Current Balance’ in Collection Letter

A District Court judge in New York has granted a defendant’s motion for summary judgment in a “current balance” letter case in which the plaintiffs said issues raised in a separate consent order between the defendant and the Consumer Financial Protection Bureau should raise concerns about the “credibility and veracity” of claims made by the defendant and an affidavit submitted by the defendant’s operations manager.

A copy of the ruling in the case of Kidd v. Midland Credit Management can be accessed by clicking here.

The plaintiffs received a collection letter in regards to a time-barred debt. The letter stated the “current balance” that was owed and offered settlement options to pay off the debt. The plaintiffs filed suit, alleging the use of the word “current” violated Section 1692e of the Fair Debt Collection Practices Act, which prohibits making false or misleading misrepresentations when attempting to collect on a debt. Using the word “current” could confused a least sophisticated consumer into thinking that the balance might increase in the future, the plaintiffs contended.

In filing its motion for summary judgment, the defendant included an affidavit from its operations manager, saying that interest on the account was not accruing and the balance was not going to change. The defendant also submitted other letters that were sent to the plaintiff, showing the balance was the same and thus, not changing.

The plaintiffs argued that a consent order between the defendant and the CFPB described “record-keeping issues” at the defendant and that it “repeatedly” submitted false affidavits when filing lawsuits against individuals. Such past behaviors “establishes issues with the credibility and veracity” of the information and should preclude the judge from using it to determine whether the debts were static, the plaintiffs claim.

Calling the evidence that was submitted by the defendants to supports its case that the debts were static as “uncontroverted,” Judge Roslynn Mauskopf of the District Court for the District Court for the Eastern District of New York granted the defendant’s motion for summary judgment.

Other than questioning the credibility of the information submitted by the defendants, the plaintiffs offered no contrary evidence to prove the debts were not static. And using the word “current” is not enough to confuse a least sophisticated consumer, Judge Mauskopf ruled.

“It is sometimes true that adding ‘current’ before a word can imply a coming change,” Judge Mauskopf wrote. “For instance, a husband might be surprised to hear his wife call him her ‘current spouse.’ Yet in other contexts, ‘current’ may serve to identify the present status of something that has changed in the past. The same husband would likely be less worried by his wife’s comment if she were previously married. A statement of a consumer’s ‘current’ balance carries no implication about the future where the consumer has had balances in the past. The least sophisticated consumer, understanding that balances have changed in the past, would not conclude from a ‘current balance’ statement alone that interest and fees are accruing.”

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