A penny saved is a penny earned, the saying goes. But when it comes to the Fair Debt Collection Practices Act, especially on a debt in excess of $3,000, not suing a debt collector over a penny is the best way to save your money, according to a District Court judge in New York who has granted a defendant’s motion to dismiss because the balance due and charge-off balance in a collection letter were different by $0.01.
A copy of the ruling in the case of Lamm v. FMS can be accessed by clicking here.
The plaintiff received a collection letter in regard to an unpaid credit card debt. The letter included an itemized table with information about the debt, including a Balance Due of $3,434.05 and a Charge-Off Balance of $3,434.06. Knowing that he had never made a payment of $0.01 after the debt was charged off, the plaintiff filed suit, alleging the letter violated Sections 1692e and 1692g of the FDCPA because the amount of the debt was not stated properly and the discrepancy was a false, deceptive, or misleading representation.
A least sophisticated consumer would now know how much to pay, the plaintiff argued in filing his suit. While that may be true, noted Judge Nelson S. Roman of the District Court for the Southern District of New York, did this technical falsehood — which actually credited the plaintiff with a $0.01 payment — reach the level of being materially significant? No, no it doesn’t, he said, while expressing concern for the consequences were he to find otherwise. Imagine that scenario…
any misstatement of the amount of a debt, no matter how minor, would constitute a violation of the statute. It is not hard to conceive of absurd outcomes that might result: should a one penny overstatement of a one-million-dollar debt run afoul of the statute? The FDCPA is intended to be liberally construed and broadly applied, but the Court does not believe it sweeps that broadly.