A District Court judge in New York has granted a defendant’s motion for judgment on the pleadings, but denied its motion for defense fees under the Fair Debt Collection Practices Act’s fee-shifting provision, after it was sued in a class-action for allegedly misleading the plaintiff about to whom a settled debt would be reported to, marking the second time the plaintiff’s counsel has filed such a lawsuit.
A copy of the ruling in the case of Spitz v. Nationwide Credit can be accessed by clicking here.
The plaintiff received a collection letter from the defendant that offered a number of options to settle a debt for less than the total amount owed. The plaintiff filed suit, alleging one sentence in the letter violated Section 1692e of the FDCPA. The sentence in question was, “After successful completion of the selected settlement option, your account will be reported to the creditor as settled.” The plaintiff argued that a least sophisticated consumer might be confused about whether the settled debt would be only reported to the creditor or whether it would also be reported as settled to a credit reporting agency.
Noting that the lawyer representing the plaintiff had brought a similar lawsuit alleging a similar violation, Judge Pamela Chen of the District Court for the Eastern District of New York noted that any mis-interpretation of the sentence in question that the debt would also be reported to a credit reporting agency was “not only counter-intuitive,” but also “illogical and unreasonable.”
Turning to the defendant’s request to have its attorney’s fees covered by the plaintiff, Judge Chen ruled that the defendant had not met its burden of proving that the claims were made in bad faith or for the purpose of harassment.