Judge Grants MTD in FDCPA ‘Current Balance’ Case

A District Court judge in New York has granted a defendant’s motion to dismiss after it was sued for violating the Fair Debt Collection Practices Act by referencing the “current balance” in a collection letter.

A copy of the ruling in the case of Dicristo v. National Recovery Solutions can be accessed by clicking here.

The plaintiff received a collection letter from the defendant in an attempt to collect on an unpaid student loan debt. The letter included a section that provided line items detailing the debt, including the principal balance ($4,500), interest ($111.69), penalty charges ($0.00), fees and costs ($1,122.49), and the total amount owed ($5,734.18). There was an asterisk next to the fees and costs line item that referenced a disclosure on the back of the letter that read, “[t]his collection agency fee is not due until the time of payment and the amount of the fee may decrease at the time of payment depending on the amount that is ultimately paid.”

The plaintiff filed suit, alleging the letter violated Sections 1692e and 1692g of the FDCPA because it did not the proper amount of the debt and using false, deceptive, or misleading representation or means in connection with the collection of any debt. His argument was that because the fees and costs were a contingent amount, they were not owed when the letter was printed and mailed and that a least sophisticated consumer would be confused that the fees and costs might be different at some future, unspecified date.

The defendant countered that the total balance in the letter was accurate and if the plaintiff had made a payment for $5,734.18, then the debt would have been considered to be paid in full.

Judge Joanna Seybert of the District Court for the Eastern District of New York rejected the plaintiff’s argument, saying the letter “clearly” stated the amount that was owed and because it included the safe harbor language from Avila v. Riexinger & Associates that “[b]ecause of interest or other fees that may vary from day to day, the amount due on the day you pay may be greater.”

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