Judge Grants Motion for Defendant Accused of Threatening to Sue

A District Court judge in Illinois has granted a defendant’s motion for judgment on the pleadings in a Fair Debt Collection Practices Act case in which a collection agency was accused of threatening legal action which it did not plan to take.

A copy of the ruling in the case of Zarate v. I.C. System, Inc., can be accessed by clicking here.

The plaintiff received two collection letters from the defendant that were sent six months apart. The first letter contained the following disclosure:

If you do not communicate with us to discuss payment on this account, our client has authorized us to utilize additional remedies to recover the debt. Including sending the account to an attorney.

The second letter contained the following disclosure:

This debt remains unpaid. We have recommended to our client that he send this debt to an attorney to present an action to charge you for the debt. You can still avoid the possibility of a lawsuit if you pay the debt or contact our office to discuss payment.

The plaintiff alleged the letters violated Sections 1692e(5) of the FDCPA by threatening to take action which it did not intend to take and Section 1692f of the FDCPA by using unfair or unconscionable means to collect on a debt.

The distinction between the two letters is that the first one identifies the involvement of an attorney as one option and does not convey that litigation is imminent, noted Judge John Robert Blakey of the District Court for the Northern District of Illinois, Eastern Division. The second letter, Judge Blakey noted, does indicate that litigation is imminent. The defendant submitted documentation noting that two days before the second letter had been sent the account had been authorized to be referred to an attorney. Two months later, the defendant initiated the pre-litigation process, according to its records.

“ICS, in short, intended to take the action threatened in its letter,” Judge Blakey wrote in his ruling. “As a result, Plaintiff cannot show that the July letter was false or misleading in violation of § 1692e, and ICS is entitled to judgment as a matter of law on this claim.”

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