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Allied Interstate Inaccurate Amount of Debt FDCPA Class Action

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The complaint for this class action claims that Allied Interstate, LLC violated the Fair Debt Collection Practices Act (FDCPA). At issue is the company’s statement of the amount of the debt, which the complaint says is misleading. 

The class for this action is

  • All individuals whom Allied’s records show lived in New York State and who were sent a collection letter in substantially the same form as the letter sent to the plaintiff in this case, and 
  • The letter was sent to a consumer seeking payment of a personal debt,
  • The letter was not returned by the postal service as undelivered, and
  • The individual asserts that the letter contains violations of the FDCPA for misrepresenting the amount of the debt and failing to state accurately the amount of the debt in the initial communication.

Congress passed the FDCPA to try to stem abusive practices among third-party debt collectors. Among other things, the FDCPA sets forth requirements for the information a third-party debt collector must provide to a consumer, either at the first contact or within five days of it. 

This case refers to a consumer debt allegedly incurred by plaintiff Eter Bakhturidze. At some point, the debt was transferred to Allied for collection. Allied sent Bakhturidze a collection letter dated September 12, 2018.

The letter contained these sentences: “As of the date of this letter, the Total Balance is $1,413.67 and the Amount Due Now is $271.00. Because the creditor continues to assess interest and late fees on the debt, the amount due on the day you pay may be greater.”

According to the complaint, the total amount due is unclear. “In order to comply with the FDCPA’s provision which mandates that a collector inform the consumer in its initial communication of ‘the amount of the debt’,” the complaint says, “the collector must give the consumer the tools in which the consumer could easily calculate what he or she will need to pay to resolve the debt at any given moment in the future.”

To do this, the complaint says, the consumer would have to know the interest rate, the type of charges, and when the interest and charges would be applied to increase the debt balance. 

Compliance with the FDCPA’s requirements is often judged by the standard of the “least sophisticated consumer.” According to the complaint, the least sophisticated consumer would not be able to determine from the letter what the amount of the debt was at any given point in the future and therefore would not be able to make the best decisions about when and how to pay it.

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