A federal judge in New York has dismissed a lawsuit filed by Annmarie Avila, who was attempting to sue a collection agency for violating the Fair Debt Collection Practices Act by using the safe harbor language her original lawsuit helped create.
A copy of the ruling in Avila v. Reliant Capital Solutions can be accessed by clicking here.
Avila’s name is most prominently associated with Avila v. Riexinger & Associates, in which she sued because a collection letter referenced the “current balance” of an unpaid debt, but did not mention that interest and fees were accruing on the account. The Second Circuit Court of Appeals ultimately ruled the agency attempting to collect the debt violated the FDCPA, but created safe harbor language that could be used in collection letters to prevent other agencies from being sued in similar suits.
In this newest case, the plaintiff filed suit because the agency allegedly violated the FDCPA by using the safe harbor language, even though, technically, some of it did not apply. The collection letter included the following passage:
As of the date of this letter, you owe $33,151.18. Because of interest, late charges, and other charges that may vary from day to day, 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 (877) 404-8853.
However, in this case, only interest was according on the debt; late charges and other charges were not accruing, which the plaintiff said was a false, deceptive, or misleading statement and a violation of the FDCPA.
The plaintiff’s original case did not require the agency to state which of the additional charges may be accruing, Judge Arthur Spatt of the Eastern District of New York wrote in his ruling, so the plaintiff could not accuse another agency of violating the FDCPA by not delineating which of the charges were being added to her debt.
However, the language of the safe harbor and its applicable case law moots any need for the Court to determine the sufficiency of the Plaintiff’s pleadings regarding “late fees” and “other fees.” Avila did not require a debt collector to state whether each of these additional charges, “interest,” “late charges,” and “other fees,” were individually increasing. The safe harbor correctly states that any of these additional charges may increase over time. In order for the safe harbor language to be accurate, it is only necessary for one of the three components to change. As interest was accumulating on Avila’s debt, the Letter’s accuracy does not need to specify which of those components fluctuate nor does it require all three to do so.
While agreeing to dismiss the charges that the defendant violated the FDCPA, Judge Spatt denied a motion from the defendant for attorney’s fees and costs to be covered by the plaintiff.
