New York Federal Court Holds “No Obligation to Renew” Language in Collection Letter Does Not Violate Fair Debt Collection Practices Act

The United States District Court for the Southern District of New York recently held that a debt collector does not violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) when it sends a collection letter that, among other things, states that the collector “is not obligated to renew this offer.”  See Rajkumar v. FBCS, Inc., 2021 WL 949867 (S.D.N.Y. Mar. 12, 2021).  A debt collector sent “substantively identical” collection letters to the two named Plaintiffs in this case. The body of the letter stated that the current creditor had “authorized [the collector] to accept a reduced amount to resolve [Plaintiff’s] account,” and then provided various options for how the debtor could pay the reduced amount. Notably, one of the options provided in the letter was to pay a certain down payment and then pay a “remaining balance . . . 30 days after [the] 1st payment is received.” The back of the letter went on to state that “[the collector] is not obligated to renew this offer.” Lastly, the back of the letter also provided notices regarding the prohibition by law of the use of abusive, deceptive, and misleading debt collection efforts by collectors as well as certain types of income that may not be taken to pay debts in the event a money judgment is rendered against a debtor in court. Plaintiffs brought a putative class action in the Southern District on behalf of others who had received collection letters from this particular collector under the FDCPA, alleging four violations: (1) that the “debtor is not obligated to renew this offer” language “could lead the least sophisticated consumer to believe that Defendant is not obligated to accept disputes” nor send a verification of the debt or other certain required information upon Plaintiff’s request; (2) that the letter did not make clear that the consumer could dispute the debt in writing, as the letter provided multiple addresses by which the letter’s recipient could respond to the debt collector; (3) that the offer to make a down payment, then pay the remaining balance within thirty days violated the FDCPA because it was open to multiple interpretations as to when the thirty days expired; and (4) that the required validation notice was “buried” within its text, making the reader “uncertain” about or likely to “overlook” her rights. The debt collector filed a motion to dismiss the complaint for failure to state a claim.

The District Court granted Defendant’s motion to dismiss. The Court initially noted that, “In the Second Circuit, the question of whether a communication complies with the FDCPA is determined from the perspective of the ‘least sophisticated consumer.’” Here, the Court found that, reading the letter as a whole, the least sophisticated consumer would be able to understand that the “offer” that debtor was not required to renew, based on the letter’s language, was the reduced payment amount and various payment options given to satisfy the debt, not any other required notices or options related to disputing or inquiring about said debt. Second, the Court found that the letter still made clear that the debtor could respond in writing, despite collector’s use of multiple addresses, since “Defendant’s address . . . appears below Defendant’s name three times.” The Court also found that “the option to make a down payment and then pay the remaining balance after the initial payment is received is not misleading or in violation of the FDCPA,” and “the placement of the validation notice” did not violate the Act where it was “legible . . . among other important information” and “not printed in a smaller font, or overshadowed by other large or bold font.” As a result, “nothing about the collection letter at issue . . . leads to the conclusion that the recipient would be duped into validating a debt she did not owe” and therefore, Defendant’s motion to dismiss the FDCPA claims were granted.

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