Sometimes, even when a collector does a nice thing, it ends up getting sued. But a District Court judge in New York has granted a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act because it included a line item in a collection letter referencing post-judgment interest that the defendant actually had credited back to the plaintiff.
A copy of the ruling in the case of Navon v. Schachter Portnoy, L.L.C., and Cavalry Portfolio Services, LLC, can be accessed by clicking here.
The plaintiff incurred a credit card debt of $6,257.68, which was sold to the Cavalry and placed with Schachter for collections. Both Cavalry and Schachter sent letters to the plaintiff, saying the debt due at charge-off was $6,331.07, but the amount owed was $6,257.68 and any difference was due to credits that were applied prior to the date the letter was sent. The plaintiff called Schachter and questioned the two different amounts and was told that Cavalry had credited back interest that had been added after the debt was charged off. A week after speaking with the defendant, the plaintiff filed suit, alleging the letter violated Section 1692e by creating false record that could be used later to extend the statute of limitations and by mis-stating the amount that was owed.
Even though the letter did not misrepresent the amount that was owed, had it done so there is no support for the plaintiff’s “convoluted theory” that a least sophisticated consumer would have been confused by the differing amounts, ruled Judge Pamela Chen of the District Court for the Eastern District of New York.
“Plaintiff’s inference or suspicion that Schachter’s letters might be used deceptively in this manner in subsequent litigation simply does not qualify as a concrete, false representation as to the legal status of the debt owed by Plaintiff,” Judge Chen wrote. “Only a consumer who searches for an ambiguity, and not the least sophisticated consumer relevant here, would interpret Schachter’s letters as a claim that the statute of limitations to pursue collection on the debt had been extended.”
