New York City Debt Collection Defense Attorney

"May or may not" language in collection letter violates FDCPA, court ssays

In this new decision from the EDNY, the plaintiff, a consumer named William Rozier, filed suit on behalf of himself and others similarly situated against debt collector Financial Recovery Systems under the FDCPA and NY Gen. Bus. Law § 349 claiming a debt collector sent a misleading debt collection letter. The letter, from Financial Recovery Systems, attempted to collect a debt allegedly owed to Applied Bank and stated as follows:

"As of the date of this letter, you owe $2387.23. Interest, late charges, and other charges may or may not be applicable to this account. If some or all of these are applicable, they may vary from day to day, and the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check, in which event we will inform you before depositing the check for collection. For further information, write the undersigned or call 1-866-211-0386."

Financial Recovery Systems filed a motion to dismiss the case for failure to state a claim. The Federal District Court for the Eastern District of New York denied the motion, a victory for the consumer. In an opinion written by Judge Irizarry, the court applied the “least sophisticated consumer” standard, noting that the trend in the Second Circuit is to treat the standard as a question of law rather than fact, making the question determinable on a motion to dismiss.

The court went on to state that, “instead of providing the consumer with the actual amount due as required by the FDCPA, the language at issue in the collection letter makes it unclear to any consumer, sophisticated or not, the amount of debt due including what, if any, additional charges will apply.”

The court also determined that although Financial Recovery Systems' letter was based on “safe harbor” language found acceptable by the Seventh Circuit in Miller v. McCalla,[1] by adding the additional language “may or may not be applicable,” the debt collector could create confusion for the least sophisticated consumer.

The court concluded that the consumer plaintiff stated a plausible claim that the defendant debt collector’s letter violated FDCPA §§1692e(2) and 1692g(a), and denied the defendant’s motion to dismiss.

- Sheril Stanford