Judge Grants MTD in FDCPA Case Over Settlement Language in Letter

A District Court judge in Arizona has granted a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act by using the phrase “settled in full” in a collection letter that offered to settle a debt for less than the full amount owed.

A copy of the ruling in the case of Cosio v. Afni Inc. can be accessed by clicking here.

The plaintiff received a collection letter seeking to recover $159.87 that was owed to a creditor. The letter included an offer to settle the debt for less than the full amount owed. The text of the offer stated:


Save $63.95 and resolve your account

We are making another attempt to contact you regarding your overdue account. In an effort to resolve this matter we will accept $95.92, 60% of the current balance. Once you pay this discounted amount, your account will be closed and marked settled in full with Afni, Inc. and CENTURYLINK.

The plaintiff filed suit, claiming the letter violated Section 1692e of the FDCPA by using false, deceptive, or misleading representations in connection with the collection of a debt. The plaintiff’s contention was that the phrase “settled in full” was misleading because “settled” means payment less than full and “in full” means paid in full. The plaintiff said he was confused as to whether paying the settlement offer would “satisfy his account in entirety.”

Judge Douglas Reyes of the District Court for the District of Arizona, pointed to another phrase in the settlement offer — “Once you pay this discounted amount, your account will be closed” — as pretty explicit evidence of what would happen if the plaintiff paid the $95.92.

“A consumer with a basic level of understanding and a willingness to read with care would have understood the entirety of the letter to mean that, in exchange for a payment of $95.92, AFNI and Centurylink would resolve and close the account,” Judge Reyes wrote. “Any other interpretation is unreasonable.”

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