The Court of Appeals for the Fifth Circuit has upheld a lower court’s ruling that mentioning in a collection letter that interest may accrue on an unpaid debt is a “common-sense truism about borrowing” and not a violation of the Fair Debt Collection Practices Act.
A copy of the ruling in the case of Salinas v. R.A. Rogers can be accessed by clicking here.
The plaintiff received a collection letter from the defendant. The letter included line items detailing the amount owed, including “Principal Balance” and “Total Amount Due” of $4,629.96. The letter also include line items for “Interest” and “Fee[s]” which were listed as $0.00. Near the bottom of the letter, there was a disclosure that read, “In the event there is interest or other charges accruing on your account, the amount due may be greater than the amount shown above after the date of this notice.”
The plaintiff filed a class-action lawsuit, alleging the disclosure violated Section 1692e of the FDCPA by using false, deceptive or misleading representations when collecting on a debt because the defendant was not allowed to collect interest on debts placed by the original creditor and the original agreement between the plaintiff and the creditor did not allow for interest to accrue.
A District Court judge granted summary judgment for the defendant, which the plaintiff appealed to the Fifth Circuit.
But the Fifth Circuit made short work of the plaintiff’s arguments.
“The challenged statement in the letter is not false, deceptive or misleading because it merely expresses a common-sense truism about borrowing — if interest is accruing on a debt, then the amount due may go up,” it wrote in its ruling. “That simple statement would have been clear even to an unsophisticated borrower thousands of years ago, just as it would be today. We therefore conclude that putting the statement in a dunning letter does not violate the FDCPA.”