Judge Grants MSJ For Defense in FDCPA Suit Over Reference to Changing Debt Balance in letter

A District Court judge in Pennsylvania has granted a defendant’s motion for summary judgment after it was accused of violating the Fair Debt Collection Practices Act by sending the plaintiff a collection letter that indicated the amount owed may “increase or decrease” which allegedly created a false sense of urgency.

A copy of the ruling in the case of Echols v. Premiere Credit of North America can be accessed by clicking here.

The plaintiff received a collection letter from the defendant seeking to recover $173.93 for an unpaid credit card debt. The letter included the following statement that the “amounts listed are current as of 11/27/2018. Amounts may increase or decrease due to application of payments and/or adjustments. Please call (888) 403-1647 for a payoff amount.”

The defendant does not collect interest, collection fees, or late fees for this particular client, but is authorized to collect the balances on accounts, which may differ from the amount listed in a collection letter if the individual makes a payment directly to the creditor or if a payment was returned for insufficient funds.

The plaintiff argued that the letter violated Section 1692e(10) of the FDCPA by making false representations or using deceptive means to collect on a debt. She argued that using the word “adjustments” in the letter could lead an unsophisticated consumer to believe that the term references interest, late fees, or other charges, which the defendant was not allowed to collect.

Because the language did not explicitly state that charges or accruing or threatened actions that the defendant was not allowed to take, it was not false or inaccurate, determined Judge Gerald McHugh of the District Court for the Eastern District of Pennsylvania.

The plaintiff also alleged that the letter violated Section 1692g(a)(1) of the FDCPA because it stated the balance that was owed but then directed the plaintiff to call for any change in that balance. Because the amount of the debt in this case was not static — the balance could change if a payment was made directly to the creditor or if a payment was returned — the defendant was not wrong to invite the plaintiff to call for an updated balance, Judge McHugh ruled.

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