A federal judge in Illinois has acknowledged the dilemma facing debt collectors who are between “a rock and a hard place” when it comes to including information about interest and other charges or fees in a collection letter. The judge granted a motion to dismiss last week that was filed by the defendant, a collection agency.
The ruling in the case of Jose Delgado v. Client Services, Inc. can be accessed here.
The defendant sent the plaintiff a collection letter, attempting to collect on an defaulted credit card debt.
The letter included the language:
[one-half-first]Balance Due At Charge-Off:[/one-half-first]
[one-half] 2,619.26[/one-half]
[one-half-first]Interest:[/one-half-first]
[one-half] 0.00[/one-half]
[one-half-first]Other Charges:[/one-half-first]
[one-half] 0.00[/one-half]
[one-half-first]Payments Made:[/one-half-first]
[one-half] 20.00[/one-half]
[one-half-first]Current Balance:[/one-half-first]
[one-half] 2,599.26[/one-half]
The plaintiff sued, alleging violations of Section 1692(e) and 1692(g) of the Fair Debt Collection Practices Act because including the interest and other charges items in the letter indicated that those fees would begin accruing on the debt if the plaintiff did not make any payments.
Under Section 1692(e), collectors are prohibited from making “any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
The judge did not buy the plaintiffs argument that including the items would be confusing to the least sophisticated consumer and acknowledged that debt collectors face a difficult situation when it comes to determining how much information to include in a collection letter. Wrote District Judge Sara Ellis:
To find otherwise places debt collectors between a rock and a hard place, where they cannot simply list the amount owed, for fear of being misleading, but likewise, cannot breakdown the amount into categories either, for fear of being misleading. Debt collectors would be damned if they do and damned if they don’t. This is clearly not what Congress intended the FDCPA to do – essentially turn debt collectors into a modern-day version of Goldie Locks, who cast about searching for the letter that is just right, not listing too little information or too much.
The plaintiff also accused the defendant of violating Section 1692(g), which requires debt collectors to notify individuals by providing the actual amount of the debt. Again, Judge Ellis was not buying it.
The arguments here are linked to the arguments regarding whether the Letter’s itemization was misleading: had the Court found that the itemization was misleading or deceptive in that it implied that interest or other charges would later be charged, there would also be a potential implication that Client Services intended to charge interest or other fees. Without that, the Letter is devoid of any indication that Client Services intended to charge Delgado interest or other fees
