The Third Circuit Court of Appeals has upheld the dismissal of a Fair Debt Collection Practices Act case in which the plaintiff alleged that a pair of disclosures in a collection letter were misleading, saying that one of the disclosures did the opposite of what the plaintiff alleged and the other allegation was nothing more than speculation.
A copy of the ruling in the case of Dotson v. Nationwide Credit can be accessed by clicking here.
The plaintiff received three collection letters from the defendant. Each letter mentioned “The Account Balance as of the date of this letter is shown above” and one of the letters offered a settlement option for paying less than the full amount owed, but disclosed that should the plaintiff choose that option, the original creditor “may offer you less favorable terms in the future for some Chase products or services, or may deny your application.”
The plaintiff alleged that using the phrase “as of the date of this letter” could confuse a least sophisticated consumer by indicating that the amount of the debt was changing, when in fact it was static.
Agreeing with the District Court, the Appeals Court ruled that the phrase actually does the opposite. That language, the Appeals Court wrote, “actually guards against potential confusion about the amount owed by clearly specifying the date on which the debt was calculated, preventing any misunderstanding that could arise if, for example, a payment crossed in the mail with the collection letter.”
Regarding the settlement language and the associated disclosure about what might happen in the future, the Appeals Court ruled that the allegation made by the plaintiff — that a least sophisticated consumer would mistakenly believe that he or she had to pay the whole amount in order to maintain creditworthiness — was nothing more than speculation. Such a disclosure is not the same as collection letters which threaten an individual with a lawsuit if a debt is not paid, even though the collector has no plans to do so.
