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 by referring to the “current balance” in a collection letter.
A copy of the ruling in the case of Mun v. Midland Credit Management can be accessed by clicking here.
The plaintiff received a collection letter from the defendant, which included three different payment options and stated that the “current balance” was $4,596.31. The first option offered a 40% discount on the total amount owed. The second option offered a payment plan to repay 85% of the debt in 12 months. The third option offered a payment plan of as low as $50 per month. The plaintiff alleged the third option violated the FDCPA because “[t]o the least sophisticated consumer, this instruction could imply that if she chooses to pay as low as $50/month, then the total of her payments may amount to more than the aforementioned ‘Current Balance.’ ” Because the debt was not accruing interest or late fees, the phrase “current balance” could confuse the least sophisticated consumer into thinking that was the case, the plaintiff alleged.
The plaintiff tied her argument to a footnote in the ruling of Taylor v. Financial Recovery Services, which stated that a collector is considered to be complying with the FDCPA when it uses “balance due” instead of “current balance.” The plaintiff alleged that using the phrase “current balance” without specifying whether interest is accruing amounts to a violation of the FDCPA.
But Judge Vincent Briccetti of the District Court for the Southern District of New York saw through the argument, calling this a “lawyer’s case” and echoing other rulings in saying that “only a sophisticated lawyer, not the least sophisticated consumer, would conceive” of this argument.
