A District Court judge in New Jersey has granted a defendant’s motion to dismiss on two claims that it violated the Fair Debt Collection Practices Act, but denied the motion related to the other claims, while also sharing his displeasure at how collectors have induced “endless litigation” because of how they choose to word the letters they send to individuals and offering advice about how those letters should be worded in the future.
A copy of the ruling in the case of Hopkins v. Advances Call Center Technologies can be accessed by clicking here.
The plaintiff received a collection letter from the defendant and subsequently filed a lawsuit, making the following claims:
- That listing the “Amount Now Due” underneath the balance that was owed violated Section 1692g(a)(1) of the FDCPA
- That the letter failed to convey the name of the creditor to whom the debt was owed, in violation of Section 1692g(a)(2) of the FDCPA
- That failing to identify the name of the creditor also violated Sections 1692e and 1692f of the FDCPA
Judge Kevin McNulty of the District Court for the District of New Jersey reluctantly granted the motion to dismiss the 1692g(a)(1) claim and the 1692f claim, but denied the motion to dismiss the other claims.
Conceding that other courts have ruled that listing the “Amount Now Due” in a collection letter is not a violation of the FDCPA, Judge McNulty granted the motion to dismiss that claim, but not before calling out collectors for not being clear enough in their letters. Rather than list $175 as the “Amount Now Due” on a total balance of $347.48, Judge McNulty suggested the following:
“The total balance is $347.48. If you pay $175 now, we’ll stop collection activities, but you will still owe us the remaining balance of $172.48. ($347.48 minus $175 equals $172.48.) We’ll bill you for that remaining balance later.”
“Was that so hard?” he asked. “Collectors’ insistence on going right up to the line has produced seemingly endless litigation, flyspecking the precise wording of collection letters, in cases which have come to take up a disproportionate share of the federal docket. It is hard to escape the impression that the creditor finds a clear statement undesirable, and is still hoping that a certain number of debtors will pay up if they don’t understand that they are not retiring the debt.”
As for the defendant’s failure to identify the creditor to whom the debt was owed, Judge McNulty did not have the same “binding authority” to guide him, he said. The letter included a statement, “RE: JCPenney Credit Card Account” at the top, but also included the following statement in the body of the letter: “If the Amount Now Due is paid to Synchrony Bank and your account is brought up to date, we will stop our collection activity. All payments should be made directly to Synchrony Bank using the enclosed envelope. Do not send payments to this office.”
Judge McNulty also called out collectors for not being clear enough when identifying the creditor.
“Circumstances vary, but here’s an example of what I mean,” he said.
“Who you owe the money to: ABC, which issued your DEF credit card.
Who you should pay: ABC has authorized GHI to collect the debt on its behalf. Make out your check to GHI.”
“This Letter is somewhat confusing to me, and surely confusing to the consumer,” he wrote. “The subject line says ‘RE: JCPenney Credit Card Account,’ and the first line of text is ‘This account has been listed with our office for collection.’ ‘Listed?’ Okay, let that pass; The reader now has probably gleaned that she allegedly owes money for charges on a JCPenney credit card. But a few lines down, when the Letter gets to payment, it says that the amount due must be paid to Synchrony Bank. But who is Synchrony Bank and what do they have to do with my JCPenney card? Finally, the detachable payment slip is addressed to ‘Synchrony Bank/JCPenney Credit Services’ with one PO Box number. Are Synchrony and JCPenney Credit Services the same thing? Related? A joint venture? Just PO Box buddies? The Letter does not say, which means that a consumer cannot discern who owns the debt.”
Ruling that the precedents provided by the defendant, including another case in which it was sued in a similar situation, were not persuasive enough, Judge McNulty denied the motion on the 1692g(a)(2) and 1692e claims.