New York Federal Court Holds That Consumer May Pursue FDCPA Claim Based on Allegedly False Affidavit

The United States District Court for the Southern District of New York recently held that debt collectors who submit an affidavit falsely stating that a debt is due and owing may be liable under the Fair Debt Collection Practices Act (“FDCPA”), and the statute of limitations for such a claim may be tolled.  See Toohey v. Portfolio Recovery Associates, LLC, 2016 WL 4473016 (S.D.N.Y. Aug. 22, 2016).  In 2014, the debt collectors sued the consumer in a state court action for an allegedly past due debt in the amount of $976.08.  The consumer defaulted, the debt collectors obtained a judgment, and the debt collectors garnished the consumer’s wages until the judgment was satisfied.  In 2015, the Consumer Financial Protection Bureau issued a Consent Order detailing one of the debt collectors’ alleged violations of the FDCPA.  Five weeks later, the consumer filed this action in the Southern District of New York alleging FDCPA violations, among others, based on the claim that the affidavit submitted by the debt collectors in support of their state court action was false. 

The debt collectors filed a motion to dismiss arguing, among other things, that the lawsuit was barred by the statute of limitations and that any allegedly false representations were made to a court and not to the consumer.  The court denied the motion.  First, it held that the FDCPA’s one-year statute of limitations was equitably tolled because of the debt collectors’ allegedly fraudulent affidavit, which would have concealed the violations.  Second, although the court acknowledged that the Second Circuit has yet to address whether representations made to courts can violate the FDCPA, it held that the statute must be construed in a liberal fashion in order to further Congress’s intent to protect consumers, and that this alleged violation would be subject to the FDCPA.  Therefore, it denied the debt collectors’ motion to dismiss the FDCPA claims in the complaint.

For a copy of the decision, please contact Michael O’Donnell or Michael Crowley at