Relying on the policies and procedures of the original creditor and the subsequent debt buyer, a District Court judge has agreed to compel arbitration in a class-action lawsuit in which the debt buyer was accused of violating the Fair Debt Collection Practices Act by indicating the “current balance” on a debt in a collection letter without clearly stating whether the amount will or will not increase.
A copy of the ruling in the case of Brecher v. Midland Credit Management, Inc., Midland Funding, LLC, and Encore Capital Group, Inc., can be accessed by clicking here.
The plaintiff agreed to open an Old Navy credit card when shopping at the store. Even though she claims never to have received the card or the cardholder’s agreement, the plaintiff used the account for seven years by providing a picture ID and Social Security number when shopping at the retailer. When the account became delinquent, it was sold to the defendant, which sent the plaintiff a collection letter. The letter was alleged to violate the FDCPA because it referenced a current balance without indicating whether the balance will or will not increase.
The defendant filed a motion to compel arbitration. relying on affidavits from a litigation support manager at the creditor and a media team manager for the defendant. The affidavit from the creditor establishes that the company “had a regular procedure of mailing, via United States Postal Service, the credit card and a copy of the credit card agreement that governed the account for each new Old Navy cardholder.” The address that the information was sent to matches the address on each statement that was sent to the plaintiff.
The plaintiff also tried to content that the defendant did not show it had a valid assignment to collect on the debt because “there is no evidence” that the creditor sold the account to the defendant.
“These bases for opposing Midland’s motion are too flimsy to support Brecher’s position,” wrote Judge Edward Korman of the District Court for the Eastern District of New York.
