On August 28, a district court judge in the Southern District of Indiana denied a defendant debt collector’s motion to dismiss under Rule 12(b)(6) for failure to state a claim. Plaintiff David F. Driver sued LJ Ross Associates, Inc. (“LJRA”), claiming that a collection letter violated the Fair Debt Collection Practices Act because it was misleading. The Court agreed with Driver and ruled that because the total interest added and charges/adjustments were listed as $0.00, “it was reasonable for the letter to be read to imply that these charges could begin to accrue if Driver did not pay the debt.” 

In November 2018, Driver received a collection letter that listed the total amount due. As part of the itemization of the total amount due, the letter included two columns entitled “Total Interest Added” and “Total Non-Int Chrges/Adjstmts,” under which “$0.00” appeared. Driver argued that inclusion of these columns, even with a listed amount of $0.00, implied that LJRA “might add interest and charges” to the debt, even though the underlying agreement did not authorize such additional charges.   

LJRA countered that $0.00 could not misleading because the letter “expressly stated that the amount of interest and charges was zero.”   

Ultimately, precedent was not on LJRA’s side. Courts have held that listing $0.00 for other charges could imply to an unsophisticated consumer that additional charges could accrue. Instead, debt collectors should list “N/A” or decline to mention fees.  Another option is to include a 0.000% interest rate because no reasonable consumer would believe that an interest rate of 0% could result in interest accruing on the debt. LJRA’s collection letter, however, did neither. 

That is not to say that this sort of itemization is always misleading. Rather, as the Court stressed because the agreement between Driver and LJRA did not authorize such additional charges, inclusion of these amounts – even if $0 – was misleading. 

The Court denied LJRA’s motion but stressed that the parties should “note the evidentiary burdens as the litigation continues.”