FDCPA Case Law Review for September and October 2017

insideARM maintains a free FDCPA resources page to provide the ARM community a destination for timely and topical information on the Fair Debt Collection Practices Act (“FDCPA”). This page is generously supported by TransUnion. See the page here or find it in our main navigation bar from any page on insideARM under Compliance Resources.

The centerpiece of the page is a chart of significant FDCPA cases. Case information and analysis is provided by Joann Needleman, a Clark Hill attorney and leader of the firm’s Consumer Financial Services Regulatory & Compliance Group. Click on the link in the chart for the complete text of the decision. Where insideARM has already published a story on the case, we provide a link to the story.

-----------------

Here are highlights of selected FDCPA Cases from September-October 2017:

Darian Derosa v. CAC Financial

The gist: Plaintiff claims a violation of FDCPA section 1692e occurred when a second collection letter from defendant showed “...only a single balance and does not break the amount down further into principal, interest, and or late fees.”  Further, plaintiff argued that the letter was deceptive as it “can be reasonably read to have two or more different meanings, one of which is inaccurate.” CAC responded that the original creditor does not seek interest nor fees from the the account holder. The Court found that collector is not under an affirmative duty to advise that a debt will not incur interest or fees, and that the least sophisticated consumer would not be confused by an “unadorned statement of the actual balance owed.”

Myron Hargreaves, Cortney Halvorsen, and Bonnie Freeman, Plaintiffs, v. Associated Credit Service, Inc., a Washington Corporation, and Paul J. Wasson and Monica Wasson, Individually and the Marital Community, Defendants

The gist: Plaintiff brought this FDCPA action against the debt collector as the result of a garnishment. State law requires the judgment creditor to affirm that the judgment remains unsatisfied, that the amount due is correct and that the creditor has "reason to believe that the garnishee is indebted to debtor in amounts that exceed the exemption limit set by federal and state law" or are otherwise exempt. The plaintiff alleged that monies garnished by debt collector were exempt. Court found that debt collector's sworn affidavit was sufficient and a debt collector would have no way of knowing whether funds were subject to exemption.

John Dix, Plaintiff, v. National Credit Systems, Inc., Defendant

The gist: Debt collector sent plaintiff a collection letter identifying creditor as "Re: Metro on 19th/Chamberlin & Assoc/G171". Creditor was Metro on 19th, the entity from which plaintiff had rented an apartment in the past. However, the creditor was only referenced in the letter’s subject line--a violation of 1692g(a)(2), which requires the name of the creditor to be conveyed effectively to the consumer. The Court found that debt collector did not sufficiently identify Metro on 19th as the current creditor.

Smith v. Cohn, Goldberg & Deutsch, LLC

The gist: In another case involving 1692g(b)(2), a letter to the plaintiff identified four separate entities and failed to identify the creditor to whom debt was owed. The Court agreed that the plaintiff established a claim under 1692g(a)(2) and defendant's motion to dismiss was denied.

Fatema Islam, Individually and On Behalf Of A Class, Plaintiff, v. American Recovery Service Incorporated, Defendant

The gist: The Second Circuit’s decision in Avila v. Reixinger & Associates, 817 F.3d 72 (2d Cir. 2016) constrained this judge’s decision in yet another case about whether referencing an amount due “as of the the date of this letter” implies that post-default charges may be accruing. The Court found that a collection letter that stated balance "as of this date," but also disclosed that no additional interest or fees were being charged, was ambiguous and thus false and deceptive.

Eric Delfonce, aka Elie Delfonce, Plaintiff-appellant, v. Eltman Law, P.C., Defendant-appellee

The gist: A law firm sent a letter regarding a prior judgment. It contained a disclaimer of attorney involvement and a statement that the letter should not be construed as a threat of suit. The letter also contained information about the date of the prior judgment. Plaintiff alleged that the mere use of the word ‘judgment’ was a threat of legal action, but the lower court disagreed. The circuit court affirmed the lower court’s decision and found that the letter was not in any way deceptive, refuting any claim that use of the word ‘judgment’ was a threat.