The United States District Court for the Eastern District of New York recently granted a debt collector’s motion for judgment on the pleadings, finding that so long as a debt collector either accurately informs the consumer that the amount of the debt stated in the letter will increase over time, or clearly states that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date, the debt collector will not be liable under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §1692e. See Klein v. Forster & Garbus, LLP, 2021 WL 2646334 (E.D.N.Y. June 28, 2021). In the case, a debt collector sent the plaintiff a collection letter (the “Letter”), which provided that the plaintiff had an outstanding balance and that, “[i]f interest or other charges or fees accrue on this account, after the date of this [L]etter, the amount due on the day you pay may be greater.” The plaintiff subsequently brought a putative class action against the debt collector, alleging violations of the FDCPA. Specifically, the plaintiff alleged that the Letter was misleading because it “merely allude[d] to the possibility of interest accruing[,]” when, in fact, “[the debt collector was] well aware that interest [was] definitely accruing[.]” The plaintiff further alleged that the Letter used language that was confusing to the plaintiff since it was “unclear as to whether or not the account was actually, currently accruing interest when it simply could have stated that interest was accruing.” The debt collector moved for judgment on the pleadings.
The Court granted the debt collector’s motion. First, it found that although the plaintiff asserted that he “[brought] this class action on behalf of a class of New York consumers[,]” he failed to allege that he is a consumer. Next, the Court held that the plaintiff failed to adequately plead that the Letter was misleading under the FDCPA. Relying on Avila v. Riexinger & Assocs., LLC, 817 F.3d 72 (2d Cir. 2016), the Court found that the Letter provided the safe harbor language set forth by the Second Circuit. The Court explained that Avila did not require debt collectors to use “any particular disclaimer.” Rather, so long as a debt collector “either accurately informs the consumer that the amount of the debt stated in the letter will increase over time, or clearly states that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date[,]” the debt collector will not be liable under 15 U.S.C. §1692e. In doing so, the Court rejected the plaintiff’s argument that by using the conditional “if,” the least sophisticated consumer is left with “no reasonable basis to determine whether interest is accruing on the account.”
The plaintiff further argued, to no avail, that the Letter violated 15 U.S.C. §1692e because the body contained “no explicit reference to an 800-number”. The Court found, however, that “[d]ebt collection letters are to be read in their entirety.” Here, the top right corner of the Letter listed: (1) a toll-free number with an extension; (2) the name of the representative assigned to the collection; and (3) the debt collector’s operating hours. Further, the second line of the Letter stated, “[i]n order to pay your indebtedness, and satisfy the judgment, contact our office to make arrangements to pay.” Finally, the Court denied the plaintiff’s informal request for leave to amend the Complaint with respect to the allegations regarding the Letter's failure to disclose whether interest was accruing and to add an allegation that the Letter violated 15 U.S.C. §1692e because it falsely implied that the debt collector had a legal right to collect fees and other charges. The Court found that, among other things, the proposed amendment would be futile. Given the foregoing, the Court granted the debt collector’s motion for judgment on the pleadings and denied the plaintiff leave to amend the Complaint.