Judge Grants MTD in FDCPA Class Action Over $0.00 Balance Line Item in Letter

In a case that was defended by Patrick Newman at Bassford Remele, a District Court judge in Wisconsin has granted a defendant’s motion to dismiss after it was sued in a putative class action for violating the Fair Debt Collection Practices Act because it included line items in a collection letter indicating that the plaintiffs owed $0.00 on certain debts, which the plaintiffs claimed was confusing and misleading, in light of language in the letter that said the accounts “have not been paid in full.”

A copy of the ruling in the case of Slomanski and Brusewitz v. Alliance Collection Agencies can be accessed by clicking here.

The plaintiffs received collection letters in regards to multiple healthcare debts that were owed. The letters included a breakdown of the debts, listing the provider, dates of service, a reference number, and the total balance. Some of the debts had a total balance of $0.00, but were included in the list anyway. The plaintiffs filed suit, alleging a least sophisticated consumer would be confused and misled about the debt and that contacting an individual about a debt with a $0 balance is harassment because no collection activity could legally be taken.

After going into great detail about how the plaintiffs had standing to file their lawsuit, Judge William Duffin, a Magistrate judge with the District Court for the Eastern District of Wisconsin, then addressed whether the plaintiffs stated a claim in their suit.

Judge Duffin, in teaching a math lesson that most elementary school students would be able to understand, tossed the plaintiff’s argument that a least sophisticated consumer would be confused about seeing a line item for $0.00 in a collection letter and think they owed something greater than that. “The plaintiffs’ allegation that a consumer receiving such a letter would think the actual balance on the zero-balance account was a number greater than zero — i.e., that 0 ≠ 0—is the type of bizarre and idiosyncratic interpretation that not even an unsophisticated consumer would make,” Judge Duffin wrote.

Judge Duffin did not that had the $0.00 entry been the only debt listed in the letter, he might have reached a different conclusion about whether the letter was confusing or misleading.

The judge also sided with the defense as it pertained to the plaintiff’s claim that a statement in the letter saying the defendant was authorized to refer the account to an attorney for the purposes of initiating a lawsuit was not problematic, because there is nothing wrong with making such a statement. “The statement says nothing about directing litigation,” Judge Duffin wrote. “In fact, it doesn’t even say that Alliance had referred the matter to an attorney or that Alliance was intending to do so. The statement simply informed the consumer that such authorization had already been given.”

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