Second Circuit Holds That FDCPA Cause of Action Accrues When Bank Account Is Frozen, Not When Restraining Notice Is Issued

The United States Court of Appeals for the Second Circuit recently held that a cause of action under the Fair Debt Collection Practices Act (“FDCPA”) accrued for statute of limitations purposes when the bank improperly froze the plaintiff’s bank account, not when the debt collector’s attorney mailed the restraining notice to have the account frozen.  See Benzemann v. Citibank N.A., 2015 WL 7145772 (2d Cir. Nov. 16, 2015).  In the case, one of the defendants obtained a judgment against a debtor, and its attorney served the bank with a restraining notice to freeze the debtor’s account.  The notice correctly listed the judgment debtor’s name, but mistakenly included the social security number and address of another individual with the same last name as the debtor.  The bank then froze this other individual’s bank account, and he filed a claim against both the bank and the attorney who served the notice, arguing that the notice was “false, deceptive or misleading.”  The defendants filed a motion to dismiss, arguing that any alleged FDCPA violation occurred when the debt collector’s attorney sent the incorrect restraining notice.  The District Court agreed, holding that the notice was sent just over a year before the plaintiff filed his lawsuit, and the claim therefore was barred by the FDCPA’s one-year statute of limitations.  See 15 USC 1692k(d).  The Second Circuit reversed, however, and held that the violation occurred when the bank account was frozen.  Until the bank froze the account, the plaintiff had not suffered an injury and could not have filed his lawsuit.

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