The Court of Appeals for the Third Circuit yesterday affirmed the dismissal of a Fair Debt Collection Practices Act class-action case for failure to state a claim in favor of a defendant that was sued for sending a collection letter to the plaintiff that allegedly referenced an incorrect balance, did not itemize the debt, did not indicate whether interest was accruing, and whether the inclusion of attorney’s fees and reference to the original creditor were misleading or deceptive.
A copy of the ruling in the case of Velez-Aguilar v. Sequium Asset Solutions can be accessed by clicking here.
A judgment was entered against the plaintiff back in 2009 for the amount of $4,052.78. The court issued a writ of execution in the amount of $4,518.78, which included attorney’s fees and additional court costs. Two more writs of execution were issued — one in 2011 and one in 2015 — for $4,687.79 and $4,733.99.
In 2021, the defendant sent the plaintiff a collection letter, offering to settle the debt for 65% of the balance that was owed. The balance, according to the letter, $4,424.60 and listed the original creditor and the current creditor.
The plaintiff filed suit, alleging the letter violated the FDCPA in a number of ways. A District Court judge granted the defendant’s motion to dismiss, which the plaintiff appealed to the Third Circuit.
The plaintiff argued that:
- The defendant engaged in deceptive, abusive, and unfair collection practices by mis-stating the amount that was due
- The the letter violated the FDCPA because it did not explicitly indicate the character of the debt
- That including attorney’s fees in the original judgment was misleading or deceptive
- That referencing the name of the current creditor was false or misleading
The Appeals Court didn’t buy any of the plaintiff’s arguments, noting that the letter listed only one amount that was due, which would not confuse or mislead a least sophisticated borrower. As well, there was “no basis for inferring that the debt continued to be subject to increase from interest or other costs, not least because Sequium’s offer to settle for ‘65% of the balance due’ effectively rendered the debt static,” the Appeals Court wrote. Finally, there was nothing misleading about how the current creditor was identified in the letter, the Appeals Court noted.