A District Court judge in New York has granted a plaintiff’s motion for summary judgment in a Fair Debt Collection Practices Act case, but awarded the plaintiff only $500 in damages because of mitigating circumstances, after the defendant was accused of overstating the amount that was owed.
A copy of the ruling in the case of Rosen v. LJ Ross Associates can be accessed by clicking here.
The plaintiff incurred a utility debt of $543.93 that was referred to the defendant for collection. After receiving a collection letter from the defendant, the plaintiff’s husband made a payment of $100 toward the balance. Subsequently, the plaintiff’s husband called the defendant to discuss the debt, but the call was terminated because the representative was unable to verify the identity of the caller. Twelve days later, a different representative from the defendant called back, and asked if the person she was speaking to was the plaintiff. The plaintiff’s husband answered “yes.” During the conversation that followed, a payment plan for the remaining balance was discussed and the plaintiff’s husband asked for something in writing to be sent. The representative said that she would have another validation letter sent. A day after the conversation, a letter was sent to the plaintiff, but it referenced the original balance of $543.93 and not the balance that reflected the $100 payment that had already been made. The plaintiff filed suit, alleging the letter violated Section 1692e of the FDCPA by misstating the amount of the debt that was owed.
Both the plaintiff and the defendant filed motions for summary judgment, but Judge Allyne Ross of the District Court for the Eastern District of New York sided with the plaintiff because a least sophisticated consumer could interpret the second letter to mean that $543.93 was still owed, even though the defendant had told the plaintiff’s husband over the phone that the debt was $100 less than was stated in the letter and the plaintiff testified that she never saw or read the second letter.
The defendant also argued that it was entitled to the FDCPA’s bona fide error defense, but Judge Ross ruled that the defendant did not have the proper documented policies and procedures in place to avoid such errors from occurring. “Defendant does not make any attempt to show that the representative’s verbal statement of the correct debt amount was an implementation of a broader policy or that it was connected to Mr. Rosen’s request for a statement, which was in fact made after the representative stated the correct amount,” Judge Ross wrote. “Therefore, defendant has not made a sufficient showing to support its bona fide error defense.”
However, because the noncompliance with the FDPCA was not “intentional,” and because the defendant did verbally inform the plaintiff of the correct amount owed, Judge Ross halved the statutory damages award to the plaintiff to $500.