Appeals Court Affirms Dismissal of FDCPA Suit Over Letter Itemizing ‘$0.00’ in Interest, Fees

The Court of Appeals for the Third Circuit has affirmed the dismissal of a Fair Debt Collection Practices Act case in which the defendant was sued for itemizing the interest and fees due as “$0.00” in a collection letter because the plaintiff claimed the itemization falsely implied that they could accrue in the future.

A copy of the ruling in the case of Hopkins v. Collecto can be accessed by clicking here.

The case was made doubly interesting by the fact that the Consumer Financial Protection Bureau filed an amicus brief on behalf of the defendant, arguing that itemizing the debt in a collection letter was equivalent to receiving a receipt when making a purchase in a store in that it discloses what already happened and not what may happen in the future. Without mentioning the brief, the Third Circuit agreed with the CFPB’s line of thinking.

The plaintiff attempted to claim that the “least sophisticated debtor” standard in the Third Circuit is more forgiving than the unsophisticated debtor standard in other circuits that have ruled on this issue, but the Third Circuit said that, word choice aside, the standards are “functionally equivalent” and sided with their sister circuits in agreeing with the District Court ruling.

But even if they didn’t, the Panel wrote, they would still uphold the dismissal because reading the letter as anything other than an attempt to inform the recipient that nothing is owed relative to fees or interest is “to be callow to an ‘unrealistic and fanciful’ degree.”

“Our FDCPA case law does not support attributing to the least sophisticated debtor simultaneous naïveté and
heightened discernment,” the Panel wrote in its ruling. “Were we for some reason constrained to consider only the law of Circuits that employ the word ‘least’ in their FDCPA standards, we would still affirm.”

The Panel did note in a footnote that the CFPB has “seemingly condone[d] itemizing interest and fees as Collecto did” in its Debt Collection Rule.

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