Judge Grants MTD in FDCPA Case Over Balance, Check Processing Disclosures

A District Court judge in New Jersey has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class-action lawsuit, ruling that disclosures related to check processing and the balance that was due did not violate the statute.

A copy of the ruling in the case of Hirschman v. DCM Services can be accessed by clicking here.

The plaintiff received a collection letter from the defendant. The plaintiff filed suit, alleging that two disclosures in the letter violated sections of the FDCPA. The two disclosures were:

As of the date of this letter, the Estate owes an unpaid balance of $5079.38. Please note that the unpaid balance may change based on insurance payments or adjustments or other invoices not yet billed. We will inform you of any balance adjustments.


When you provide a check as payment, you authorize us to either use the information from the check to make a one-time electronic transfer from that bank account, or to process the payment as a check transaction. When we use information from the check to make an electronic funds transfer, funds may be withdrawn from that bank account as soon as the same day we receive payment, and you will not receive the check back.

The plaintiff alleged the balance due disclosure violated Section 1692g(a)(1) of the FDCPA because it left him confused about the amount that was actually owed.

Noting that disclosures that included language that was “more confusing” than what was used in this letter have been permitted, Judge Evelyn Padin of the District Court for the District of New Jersey ruled that a least sophisticated consumer would not have been confused upon reading that statement. The language used by the defendant “may not have been a model of clarity, but nevertheless was sufficiently clear even to the least sophisticated consumer,” Judge Padin wrote.

The plaintiff claimed the check disclosure language violated Section 1692f(4) of the FDCPA because a least sophisticated consumer could have read it as a threat to deposit a postdated check.

When looking at the historical context of what the section was included in the FDCPA — collectors would ask for checks and then cash them, knowing they would bounce, thus allowing the collector to threaten the consumer with criminal prosecution as a means of inducing an immediate payment — that is not what was happening here, Judge Padin noted. “…as DCM appears to argue, the Check Language simply reflects some tension between DCM’s good-faith attempt to comply with EFT regulations, not an exercise of the unsavory practices which the FDCPA sought to bar or something that even the least sophisticated consumer could construe as a solicitation of, or a threat to cash, a post-dated check,” Judge Padin wrote.

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