In a case that was defended by Cooper Walker and the team at Frost Echols, a District Court judge in Massachusetts has granted a defendant’s motion for judgment on the pleadings in a Fair Debt Collection Practices Act class-action case that accused the defendant of not informing the plaintiff in a letter whether interest was accruing on a judgment or specify whether the creditor was waiving any interest that may have accrued.
A copy of the ruling in the case of Bertolino v. Sequium Asset Solutions can be accessed by clicking here.
The plaintiff knew that judgments generally accrued interest, which led her to believe the amount she owed was increasing. Therefore, the plaintiff claimed, the fact the letter didn’t mention anything about interest led her to believe the letter was fraudulent and constituted a false and/or deceptive misrepresentation and unfair or unconscionable means of collecting under the FDCPA. The suit accused the defendant of violating Sections 1692e and 1692f of the FDCPA.
While noting that the Court of Appeals for the First Circuit has yet to address this issue, the judge looked to the rulings from the Second Circuit, especially those in Avila v. Riexinger & Associates and Cortez v. Forster & Garbus, which held that offers to settle a judgment dispels the risk of a collection notice misleading the debtor.
The plaintiff argued that the defendant was legally required to disclose whether interest was accruing because Massachusetts law allows for judgments to accrue interest.
“When viewed from the perspective of the least sophisticated consumer, the Settlement Letter could only reasonably be read as an offer to extinguish Bertolino’s debt upon payment of the specified amount,” wrote Judge Judith Gail Dein of the District Court for the District of Massachusetts.
Furthermore, the letter did not have an acceptance deadline date — like the letters in Avila and Cortez did — the plaintiff argued, especially because the judgment could be sold and the subsequent holder would not be obligated to any previous decisions made about charging interest.
But, as Judge Dein noted, the FDCPA “does not require that a collection notice anticipate every potential collateral consequence that could arise in connection with the payment or nonpayment of a debt.”