A federal judge in New Jersey has denied a motion to dismiss a class-action lawsuit filed by a defendant that is accused of violating the Fair Debt Collection Practices Act by including language in a collection letter about having the plaintiff contact the defendant if he had medical insurance to cover the unpaid debt.
A copy of the ruling in Morello v. AR Resources Inc. can be accessed by clicking here.
The plaintiff incurred a debt with a healthcare organization. The debt was placed with the defendant, which sent a collection letter to the plaintiff. The letter included the following language:
If you carry any insurance that may cover this obligation, please contact our office at the toll-free number above.
The plaintiff filed a lawsuit in the District Court for the District of New Jersey, alleging that the insurance language overshadows the validation notice language in the letter, “because the Insurance Language could mislead the least sophisticated debtor into believing that he or she could dispute the Debt by calling Defendant at the listed telephone number.” The plaintiff alleges that the letter violated Sections 1692(e) and 1692(g) of the FDCPA.
The defendant argued that the language “simply invited” the plaintiff to call the defendant “if he had insurance that may cover the debt,” and did not contradict the validation notice language.
The judge in this case, Judge Freda Wolfson, had the opportunity to rule on almost the exact same case against the same defendant, in which a plaintiff alleged the insurance language in a collection letter could violate the FDCPA by misleading an unsophisticated consumer.
Finding that the insurance language “is so closely related” to disputing a debt, Judge Wolfson denied the defendant’s motion to dismiss.
In sum, while delving into the “sophistication” levels of a debtor is an inherently difficult task, at a minimum, I find that language inviting a debtor to call the debt collector if another party (i.e., his or her insurance carrier) is liable for all or a portion of the debt obligation, rather than the debtor personally, could mislead that debtor into foregoing his or her statutory right to dispute a debt.
