One of the most important provisions of the Fair Debt Collection Practices Act (FDCPA) is that collections agencies must inform consumers of the amount of their debt, without ambiguity or deception. The complaint for this class action claims that a letter from Global Credit & Collection Corporation fails to do this.
The class for this action is all persons whom Global Credit’s records show live in New York and who were sent a collection letter in substantially the same form as the June 16, 2017 letter in this case, and (1) the letter was to collect a personal debt owed to Synchrony Bank, (2) the letter was not returned as undelivered, and (3) the letter contains violations of the FDCPA in failing to clearly state the amount of debt owed.
Congress passed the FDCPA to stop abuse in the collection of personal consumer debts, to make sure that consumers are provided with clear and truthful information, and to remove any advantage abusive collectors might have over collectors who used honest methods.
Debt collectors are required to make certain things clear to consumers, and the standard for clarity is the “least sophisticated consumer.”
Plaintiff Sarah Neuman allegedly owes a debt to Synchrony Bank for personal purposes. At some point, Synchrony passed the task of collecting it on to Global.
On or about June 16, 2017, Global sent Neuman a collection letter, attached to the complaint as Exhibit A. The letter showed a “Current Balance” of $7,741.20. The complaint claims that the term “Current Balance” implies that the amount is temporary, as of a certain date, and may increase at some point.
The itemization in the letter does not show that interest or fees have been added since charge-off, the complaint says, but it also does not say how long it has been since charge-off. This confuses the consumer, the complaint claims, about whether the amount will or will not increase.
The complaint claims that the designation of a “Current Balance” implies that the balance might differ on another date, but it does not definitely say whether it will or not. The complaint claims that this is deceptive or ambiguous communication of the type forbidden by the FDCPA. The consumer cannot know whether it would save money to pay now, and therefore cannot make an informed decision about the best thing to do.