On January 22, a district court in Wisconsin dismissed a debt collection action, with prejudice, on the basis that the inclusion of the current monthly payment in the “amount due now” was “not false, misleading, or confusing.” A copy of the Court’s decision can be found here.
Plaintiff Barbara Mollberg filed a complaint alleging that defendant Advanced Call Center Technologies, Inc. (“ACCT”) mailed her a letter in an attempt to collect a debt. The letter stated that the “total account balance” was $1,113 and that the “amount due now” was $234. ACCT used the term “amount due now” to mean the sum of the amount past due and the current monthly payment. The letter did not itemize those amounts. Mollberg alleged that the letter violated the law in two ways: (1) it included the current installment in the amount of the debt, and (2) the use of “amount now due” could confuse or mislead an unsophisticated consumer as to the character or legal status of the debt.
ACCT moved to dismiss the case on the pleadings, arguing that Mollberg failed to state a claim under the Fair Debt Collection Practices Act or the corresponding Wisconsin state debt collection law. The Court granted the motion and dismissed the case with prejudice.
In dismissing Mollberg’s claim that the amount of the debt could only consist of an amount that is past due, the Court explained the “amount of the debt” is the amount the debt collector is authorized to collect and is attempting to collect in its letter, which may include the current balance due. The Court explained that the plain language of the FDCPA does not require that debt collectors collect only past-due amounts or that they clearly state past-due amounts in debt collection letters. Instead, under the FDCPA, “debt” refers to the amount owed without regard to whether it is currently due or past due.
Next, the Court dismissed Mollberg’s claim that ACCT’s use of the phrase “amount now due” would materially mislead or confuse the least sophisticated consumer. Mollberg alleged that such language falsely implied that the current installment was overdue. However, the Court failed to see how “ACCT’s letter implied that the current installment was overdue.” Instead, the “amount due now” consisted of the amount past due in addition to the amount currently due. The Court held that “[a]ny consumer who interprets ‘now due’ as ‘past due’ is interpreting it in a bizarre, idiosyncratic fashion inconsistent with the unsophisticated consumer standard.” The Court similarly dismissed Mollberg’s theory that the letter “unfairly misleads the consumer about how much she needs to pay to avoid a late fee by implying that she needs to pay this amount in its entirety,” because neither the FDCPA nor Wisconsin law “requires a debt collector to notify the consumer of the minimum amount they must pay to avoid late fees.”
Lastly, the Court held that the language was not confusing based on inconsistencies with prior correspondence sent to the consumer. The Court explained that “evaluating a debt collector’s liability in light of the creditor’s prior actions concerning the debt would be absurd, as it would require debt collectors to scrutinize all correspondence the creditor had previously sent to each debtor and then tailor each letter to avoid any perceived contradiction.” It noted that there was “no support in the statute or case law for imposing such a burden on debt collectors.”
Troutman Sanders maintains a robust practice defending debt collection claims asserted against its clients and will continue to monitor developments in the law governing the FDCPA and related state laws.