In Roman v. RGS Financial, Inc., No. 2:17-cv-04917-ADS-AKT (E.D.N.Y. Sept. 6, 2019), Judge Arthur D. Spatt held that RGS did not violate the Fair Debt Collection Practices Act by failing to disclose that interest, late fees, and/or other fees were accruing.
Plaintiff Stephanie Roman alleged that RGS violated the FDCPA when it sent a collection letter pertaining to a debt owed by Roman. The letter contained a table with “Account Information,” including the current creditor, the original creditor, the amount owed ($3,981.89), and a “reduction offer” of $2,389.14. The back page of the letter included a large “IMPORTANT NOTICE” heading, followed by the validation notice language required by Section 1692g.
Roman sued RGS, alleging that the letter violated Sections 1692e and 1692g of the FDCPA because “it failed to disclose interest, late fees, and/or other fees were accruing at the time the Defendant sent the Letter.” Roman asserted that her claims were just like Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016), in which the Second Circuit had ruled that “if the amount of the debt is already increasing due to accruing interest or other charges, collection notices must either ‘accurately inform the consumer that the amount of the debt stated in the letter will increase over time, or clearly state that the holder of the debt will accept payment of the amount set forth in full satisfaction of the debt if payment is made by a specified date.’” Slip Op. 12 (quoting Avila, 817 F.3d at 77).
The Court rejected Roman’s Section 1692e claim for the simple reason that the amount of her debt was not increasing. RSG provided affidavits showing that it did not add any late fees or interest to the debt, making the amount of debt static. Because the amount was not changing, the Court held that RSG “bore no obligation to provide additional disclosures because the Debt never triggered the initial predicate required for Avila to apply in the first place – i.e., ‘interest and fees that accumulated after the notice was sent but before the balance was paid.’” Slip Op. 12 (quoting Avila, 817 F.3d at 76). Thus, the Court granted summary judgment to RGS on this claim.
Next, the Court rejected Roman’s Section 1692g claim because it did not misstate the amount of the debt and the language did not overshadow and/or contradict the language required by Section 1692g(a). Accordingly, the Court granted summary judgment to RSG on this claim as well.
This decision is important in defining the contours of the Second Circuit’s Avila holding. Specifically, this decision holds that debt collectors conform with Avila despite not inserting a disclosure regarding potential additional interest and fees as long as no interest or fees are accruing on the debt.