Judge Denies Certification in FDCPA Suit Over Credit Reporting Language in Letter

A District Court judge in New Jersey has denied a plaintiff’s motion to certify a class in a Fair Debt Collection Practices Act lawsuit, ruling that the different letter templates used by the defendant and the different language included in those templates requires individualized inquiries into whether the letters received by the members of the class were deceptive or not.

A copy of the ruling in the case of Sandoval v. Midland Funding can be accessed by clicking here.

The plaintiffs received letters from the defendant that included the following disclosure: “You are hereby notified that a negative report on your credit record may be submitted to a credit reporting agency if you fail to meet the terms of your credit obligations.” The plaintiffs sued, alleging that more than 11,000 individuals who received the letter were harmed in violation of the FDCPA because the defendant had already began reporting the negative items before the letters were sent.

Although the plaintiffs attempted to narrow the class to individuals who received a specific letter from the defendant, deposition testimony from the defendant identified as many as 14 different letter templates in different combinations in attempting to collect on the debts. In some cases, the letter in question may have been the fourth, fifth, or sixth letter that was sent to an individual, which precluded Judge Susan Wigenton of the District Court for the District of New Jersey from making a “straightforward assessment of class-wide proof.” The defendant used a “complex mailing algorithm” to determine which letters to send and the sequence in which to send them, looking at factors such as the time since the last letter was sent and the age of the debt, among others, according to the ruling. “Even if some broad common questions exist, these shared issued do not predominate,” Judge Wigenton wrote.

Furthermore, Judge Wigenton noted that “any trial that attempted to determine” whether the defendants violated Section 1692e(5) of the FDCPA “would necessitate determining whether the allegedly problematic language is, in fact, threatening or misleading — a question that another district court has answered in the negative … Thus, without an individualized inquiry, ‘the words of the [letters] in and of themselves do not appear to be deceptive’ and ‘alone do very little to prove’ Plaintiffs’ FDCPA claims.”

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