Judge Denies MTD in FDCPA Case Over Total Amount Owed

A District Court judge in New York has denied a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act because it included too many dollar amounts in a collection letter and confused the plaintiff, despite saying in the letter “you owe $7,590.41.”

A copy of the ruling in the case of Madorskaya v. Frontline Asset Strategies can be accessed by clicking here.

The plaintiff received a collection letter from the defendant. The letter indicated that the “Total Amount Due” was $7,590.41, that the “Total Due as of Charge-off” was $7,681.89, and the “Total Interest Accrued Since Charge-off” was $346.02. In the text of the letter, it read, “As of the date of this letter, you owe $7,590.41. Go to our secure website, www.payfrontline.com, [to] make payment in full or to see what payment options may be available to you.”

The plaintiff filed suit, alleging the letter violated Section 1692e(2) of the FDCPA by falsely representing the amount of the debt, Section 1692e(10) of the FDCPA by making a false or misleading representation, and Section 1692g(a)(1) of the FDCPA by not clearly indicating the amount of the debt.

The defendant first argued that the alleged misrepresentations are immaterial because the plaintiff never made any payments and thus, was in no worse of a financial situation as a result of the letter. But Judge Pamela Chen of the District Court for the Eastern District of New York determined that the language of the letter was “sufficiently ambiguous as to influence the decision-making ability” of a least-sophisticated consumer.

The amount of interest accrual is where Judge Chen focuses her decision to not grant the motion to dismiss. The defense’s argument “fails to address why the least sophisticated consumer would reasonably ignore the non-zero amount of ‘Total Interest Accrued since Charge-off’ without any information to otherwise confirm that the Total Amount Due was not accruing interest that would have to be paid in the future,” Judge Chen wrote.

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