A District Court judge in New Jersey has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act class-action, ruling the plaintiff lacked standing to sue after claiming the defendant violated the statute by failing to indicate if interest, costs, or fees were included when it referenced the balance that was owed in a collection letter that was sent to the plaintiff, who settled the debt for less than the full balance.
The Background: The plaintiff defaulted on a credit card debt, which was sold to one of the defendants. The defendant filed a collection lawsuit to recover the debt and obtained a default judgment in the amount of $8,272.73, which included the principal debt of $8,215.73 and $57 in court costs.
- The debt was placed with the other defendant, which sent the plaintiff a collection letter. In the letter, the total amount of the debt was listed as $8,710.51. The plaintiff’s attorney sent the defendant a letter, offering to settle the debt for $4,800. The defendant accepted the offer and the plaintiff paid the $4,800.
- The plaintiff then filed suit, claiming the defendant violated the FDCPA by failing to effectively convey the amount of the debt by reporting the debt owed as $8,710.51 without explaining if such an amount includes interest, costs, or fees.
The Ruling: The plaintiff claimed that the letter would confuse the least sophisticated consumer because it failed to indicate whether the balance included additional costs, fees, or interest. But where the plaintiff’s claim falls short, ruled Judge Robert Kirsch of the District Court for the District of New Jersey, is showing how any perceived lack of disclosure harmed him in any way. The plaintiff makes no allegations about detrimental actions that he took as a result of his confusion. In fact, the plaintiff settled the debt for less than the full balance owed, so what difference did it make whether there were additional fees tacked on to the balance?
