The United States District Court for the District of New Jersey recently denied a debt collector’s motion for reconsideration and held that the debt collector may have violated the Fair Debt Collection Practices Act (the “FDCPA”) by threatening litigation in an initial letter to a consumer when the debt collector always sent at least a second letter before bringing any action. See Pollak v. Portfolio Recovery Assocs., LLC, 2018 WL 3105424 (D.N.J. June 25, 2018). In the case, plaintiff brought a putative class action against the defendant debt collector alleging that the collection letter the debt collector sent to plaintiff violated the FDCPA. Among other allegations, plaintiff claimed that the letter, which included phrases such as “potential litigation” and “we are not obligated to renew this offer,” violated Section 1692e(5) of the FDCPA, which prohibits any “threat to take any action that cannot legally be taken or that is not intended to be taken.” The debt collector moved for summary judgment. The Court denied the motion, finding that a reasonable juror could read the letter as a threat to litigate, and that this was a false or misleading threat under the FDCPA. The debt collector then filed a motion for reconsideration, arguing that the Court erred in denying the motion because, even if the letter threatened litigation, there was no limitation on the debt collector bringing a lawsuit at the time so there was no FDCPA violation.
The Court denied the motion. Although the Court did not dispute that there was no legal limitation on the debt collector filing a lawsuit after sending the first letter, “the undisputed evidence demonstrated that if [the debt collector’s] debtors did not respond to the . . . Letter, [the debt collector’s] Litigation Department automatically sent [another] Letter, instead of initiating suit.” Further, this second letter was “always sent prior to initiating a lawsuit[,]” at which point the account would be referred to an attorney for the first time. (Emphasis added). Thus, the Court found that the denial of summary judgment was correct.