SDNY Judge Grants MTD in FDCPA Case Over Settlement Language in Letter

Creating a sense of urgency is a tried-and-true sales tactic that has been used time and again. Make people think they have to act fast to save a few bucks and they will often take you up on that offer. Following that sense of urgency with a note that if you need more time to make a decision, additional time might be available, may not be the best sales tactic, but for one defendant, it was enough for a District Court judge to rule that a collection letter did not violate the Fair Debt Collection Practices Act and convinced him to grant a motion to dismiss.

A copy of the ruling in the case of Skvarla v. MRS BPO can be accessed by clicking here.

The plaintiff received a collection letter from the defendant seeking to collect on an unpaid debt of more than $20,000. The plaintiff was offered three deals — a one-time payment of $7,233.52, two payments of $4,261.42, and an offer to make monthly payments to repay the full balance. Underneath the offers, the letter informed the plaintiff, “If you need additional time to respond to these offers, please contact us. We are not obligated to renew these offers.”

The plaintiff filed suit, alleging the sense of urgency that was created by mentioning that the defendant was not obligated to renew the offers violated the FDCPA because the language was false and misleading. The defendant, claimed the plaintiff was “always” required to renew the offers and a least sophisticated consumer might be susceptible to accepting one of the offers because he or she is afraid it would not be renewed. But, as noted in other rulings on the same language, letting a consumer know that the offer would be available after it was rejected would render them “useless.”

As Judge Edgardo Ramos of the District Court for the Southern District of New York ruled, even a least sophisticated consumer is expected to read the whole letter. How can someone infer a sense of urgency with respect to an offer if they are informed that “If you need additional time to respond to these offers” to “please contact us”?

“This statement undermines Plaintiff’s argument that the language is misleading,” Judge Ramos wrote in granting the motion to dismiss.