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Any opinion that starts out by stating “[t]his case is about $82.00” is not likely to go well for one party and in this instance, that was the case for Nestor Saroza. A New Jersey district court recently held that a debt collection letter was not false or deceptive when it included court costs in its demand for the balance. In Saroza v. Lyons, Doughty & Veldhuis, 2017 U.S. Dist. LEXIS 208913 (D.N.J. Dec. 19, 2017), the collection law firm filed a collection suit seeking recovery of the balance due ($9,971.55), plus court costs. Its subsequent collection letter demanded a balance of $10,053.55. The difference, $82.00, was comprised of court costs. The consumer filed suit asserting that the demand letter violated the FDCPA because the $82.00 was not part of the debt. The demand letter in question read as follows:
LYONS, DOUGHTY & VELDHUIS, P.C. . . .Re: Capitol One Bank (USA), N.A. v. NESTOR SAROZADocket No. DC-00065-16Amount Due: $10,053.55Dear NESTOR SAROZA:We have filed suit to recover the balance due in the above matter. However, our goal is to resolve the debt in a way that is manageable for you. We encourage you to contact us. If you would rather not call us, you can ask questions and/or make a settlement offer or payment arrangement proposal via our website: www.ldvlaw.com . . .THIS FIRM IS A DEBT COLLECTOR
LYONS, DOUGHTY & VELDHUIS, P.C. . . .
Re: Capitol One Bank (USA), N.A. v. NESTOR SAROZA
Docket No. DC-00065-16
Amount Due: $10,053.55
Dear NESTOR SAROZA:
We have filed suit to recover the balance due in the above matter. However, our goal is to resolve the debt in a way that is manageable for you. We encourage you to contact us. If you would rather not call us, you can ask questions and/or make a settlement offer or payment arrangement proposal via our website: www.ldvlaw.com . . .
THIS FIRM IS A DEBT COLLECTOR
In support of dismissal, the law firm presented the credit card agreement which provided for the recovery of the creditor’s collection expenses, attorneys’ fees and court costs and pointed to the collection suit to support its argument that the letter was accurate. The consumer meanwhile argued that the letter did not explain the filing fees were included and thus, was false, deceptive or misleading. According to the court, “[i]n essence, the line Saroza wants this Court to draw seems to be that collection notices which say ‘with costs’ are permissible under the FDCPA but those that add the costs into the requested sum are not.” Saroza at *7-8. The court declined to do so. Instead, the court determined that this was a distinction without a difference – particularly where the costs are accurate and the consumer was on notice from the Customer Agreement that this could happen.
The court also rejected the consumer’s argument that the omission of the court costs from the summons issued by the state court, coupled with the letter, was misleading. In doing so, the court noted that the summons was issued by the court not the defendant and placed the burden on Saroza to read the complaint served with the summons.
In dismissing the lawsuit, the Court made clear that certain basic responsibilities fall upon a consumer – to read the documents provided to him by the creditor and debt collector. The Court further emphasized a theme that is becoming more prevalent in FDCPA opinions: that the FDCPA will not allow liability for bizarre or idiosyncratic interpretations of collection notices and preserves a quotient of reasonableness and presumes a basic level of understanding and willingness to read with care. See Wilson v. Quadramed Corp., 225 F.3d 350, 354-55 (3rd Cir. 2000)
Caren Enloe is a partner who concentrates her practice in consumer financial services litigation and compliance, bankruptcy, and commercial litigation with an emphasis on creditor’s rights. She has a deep understanding of the complex compliance environment surrounding the financial services industry and regularly advises financial service companies on licensing and compliance issues involving state and federal consumer protection and finance statutes. Caren is the author of a daily blog titled: Consumer Financial Services Litigation and Compliance where she posts timely and informative updates regarding the CFPB, FTC, and a host of topical litigation issues involving consumer protection law....LEARN MORE