Judge Grants MTD in FDCPA Case Over Legal Action Warnings in Letters

A District Court judge in New York has granted a defendant’s motion to dismiss, ruling that the language that was used in a series of letters that raised the possibility that the plaintiff would be sued if she did not make arrangements to repay her debt did not violate the Fair Debt Collection Practices Act, ruling that while the letters contained “some urgency,” they did not indicate that legal action was “authorized, likely, and imminent.”

A copy of the ruling in the case of Chowdhury v. Midland Credit Management can be accessed by clicking here.

The plaintiff received six collection letters from the defendant. The last three included escalating language that informed the plaintiff that the defendant was considering litigation.

The first letter in the series, labeled PRE-LEGAL NOTIFICATION, said that the defendant was “now considering forwarding your account to an attorney … for possible litigation” and that “if we don’t hear from you or receive payment by 7/31/2020, we may proceed with forwarding this account to an attorney, ” and “[i]f your account is forwarded to an attorney, this may result in a lawsuit against you.”

The second letter, sent a month later and also labeled PRE-LEGAL NOTIFICATION, included a heading “NOTICE OF POSSIBLE ATTORNEY REVIEW” and included the following language: “We are proceeding with an evaluation of your account and are considering forwarding this account to an attorney in your state for possible litigation” and “[f]ailure to make a payment or contact us will result in the continuation of the pre-legal review process. After the pre-legal review process, your account may be forwarded to an attorney.” The letter further advises that “[i]f your account is forwarded to an attorney, this may result in a lawsuit against you.” The bottom of the letter instructs the recipient to “STOP THE PRE-LEGAL PROCESS” by paying the debt owed or calling defendant to ask about payment plans by September 4, 2020

The third letter, sent a few days after the deadline set in the second letter, was also labeled PRE-LEGAL NOTIFICATION. It also included a heading, “FINAL NOTICE” and said that the defendant “will transition your account into the attorney review process after 10/9/2020.” As in the other two letters, defendant advises that “[i]f your account is forwarded to an attorney, this may result in a lawsuit against you.” The letter further states, “This is the final written communication you will receive prior to entering the legal review process. Your prompt attention is necessary to avoid the possibility of legal action.”

The plaintiff filed suit, alleging the defendant violated Sections 1692e, 1692e(5), and 1692e(10) of the FDCPA by making false representations, threatening action that cannot be legally taken or that is not intended to be taken, and using false or deceptive means to collect on a debt.

Noting that the first two letters “couch” their references to legal actions “in terms of mere possibility,” Judge Allyne Ross of the District Court for the Eastern District of New York ruled that they “plainly do not threaten imminent legal action.”

The third letter was not as cut-and-dried, Judge Ross noted. This letter used language that evoked “certainty and urgency,” by saying that the defendant “will transition” the account and that this letter was the “final written communication.” But, in this case, there was no indication in the letter that the account was “currently” being reviewed for legal action, Judge Ross said.

“Although the phrase, ‘[defendant] will transition your account into the attorney review process after 10/9/2020’ contains some urgency, I do not find that the letter, taken as a whole, threatens legal action that is ‘authorized, likely, and imminent,’ ” Judge Ross wrote. “It is clear from the language that the account has not yet been forwarded for attorney review and therefore legal action cannot possibly yet be authorized.”

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