Judge Grants MTD in FDCPA Letter Overshadowing Case

In a case that was first spotlighted by Manny Newburger and Nabil Foster of Barron & Newburger, 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 allegedly overshadowing the validation notice in a collection letter and by falsely suggesting that a dispute had to be filed in writing.

A copy of the ruling in the case of Schik v. Miramed Revenue Group can be accessed by clicking here.

The plaintiff received a collection letter that included the following information:

  • Located about one-third down the page, in larger and non-bolded typeface is a box that contains four lines: “**** PLEASE CALL ****”; “Phone: [Defendant’s phone number] · Fax: [Defendant’s fax number]”; “Outside Illinois: [Defendant’s phone number]”; “To make your payment online, please visit us at [Defendant’s website]”
  • Near the middle of the page, in a smaller and non-bolded typeface was the validation statement
  • Located about two-thirds down the page, in larger and bolded typeface, is the statement: “Mail All Written Notices, Including Bankruptcy and Dispute Notices, To [Defendant’s Address].”
  • Immediately prior to the Validation Rights, in the same typeface are two paragraphs: “We request payment in full. If you cannot pay the amount due, but wish to make payments on this overdue debt, please call this office with your proposal and we will discuss payment terms.” and “You can mail payment to us at the address listed above. We will also accept payment by credit card or check-by-phone at the phone numbers listed above, or you can pay online at [Defendant’s website]
  • Immediately following the validation statement, in the same typeface is one paragraph: “Our client has authorized us to investigate settlement opportunities. Should you be interested in pursuing a settlement of this matter please call our office.”

The plaintiff alleged the validation statement was “formatted in a way” to make it “difficult to read and easy to overlook,” and that the “boilerplate” language discouraged individuals from reading it.

But Judge Nelson Roman of the District Court for the Southern District of New York “strongly disagree[d]” with the plaintiff’s claims.

“… while the rights are in a smaller typeface than other language
in the Collection Notice, they are easy to read,” Judge Roman wrote. “Further, they are the same size as, and located between, other language instructing Plaintiff how to pay, set up a payment plan, or pursue a settlement, casting doubt on Plaintiff’s assertion that they appear boilerplate, like ‘fine print,’ or unimportant. Plaintiff’s assertion that the rights may be overlooked is similarly without merit. They are written in the middle of the page. Other courts have held rights can even be placed on the back of the letter, so long as they are not overshadowed or contradicted by other material.”

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