The Fair Debt Collection Practices Act (FDCPA) aims to make debt collectors provide consumers with sufficient information that they can make intelligent choices about when and how to pay their debts. The complaint for this class action claims that Capital Management Services (CMS), LP did not do so, because it did not make clear the total amount of the debt.
The class for this action is all natural persons who received a letter from CMS trying to collect a past due consumer debt, dated between September 1, 2017 and the present, in a form substantially similar to Exhibit A in this case.
CMS is a third-party debt collector, exactly the kind of entity that the FDCPA seeks to regulate. CMS was assigned to collect an allegedly past-due debt from plaintiff Steve Corea. The debt purportedly originated when Corea borrowed a sum on a credit card from Barclays Bank Delaware, primarily for personal, family, or household purposes.
CMS sent Corea a letter trying to collect the debt dated September 1, 2017. A copy of this letter is attached to the complaint as Exhibit A.
The complaint objects primarily to one paragraph in the letter. After stating the amount owed “[a]s of the date of this letter,” it says, “Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check…”
One of the things a debt collector must clearly state under the FDCPA is the total amount owed. This paragraph is confusing to the consumer, the complaint says, because although it states an amount “as of” a date in the past, it does not state clearly whether interest, late charges, and other charges in fact are accruing. If they are not, it is misleading in suggesting that they are; if they are, it should state that clearly, explaining what the charges are and when they will be applied.
As it is, Corea cannot know what he would have to pay to resolve the debt on any given date. He cannot make an informed decision about what his debt would be if he paid immediately or on a future date.
The complaint says the letter is therefore false, deceptive, or misleading.