On Tuesday, December 6th, the U.S. District Court for the Northern District of Illinois held in Wilder v. J.C. Christiansen & Associates, Inc. (United States District Court, N.D.Ill., Case No. 16-cv-1979) that the language used by a collection agency in a dunning letter regarding the potential for accrual of additional interest on an account complies with Section 1692e of the Fair Debt Collection Practices Act (FDCPA).

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In this case, plaintiff Michelle Wilder’s $922.09 credit card debt was charged off by Credit One Bank, N.A. and sold to LVNV Funding, LLC, who subsequently hired collection agency J.C. Christiansen & Associates, the defendant, to collect the debt. On June 11, 2015, the defendant sent the plaintiff a dunning letter including the following language:

"Please recognize that interest may be accruing on your account. If applicable, we will receive and apply balance adjustments as interest accrues."

On February 5, 2016, the plaintiff filed a complaint against the defendant on the grounds that the language about interest were a violation of the FDCPA and the Illinois Collection Agency Act (ICAA), because the defendant could not legally add interest to the debt. This statement, according to the plaintiff, was “false, misleading, deceptive, unfair, and unconscionable.”

The defendant responded to the plaintiff’s complaint by filing a motion to dismiss the case.

In their analysis, the District Court note the importance of how statements can potentially impact consumer behavior, and that language like the one in the dunning letter received by the plaintiff would only violate the FDCPA if it would plausibly influence a consumer to change their behavior in some way. They articulate this by saying “if a statement would not mislead the unsophisticated consumer, it does not violate the FDCPA—even if it is false in some technical sense...a statement isn’t ‘false’ unless it would confuse the unsophisticated consumer.”

Regarding the specific language in the defendant’s dunning letter, the Court found the following:

"Accordingly, the interest language in Defendant’s dunning letter is not—on its face—false, misleading, confusing, or otherwise violative of Section 1692e of the FDCPA. The statement is a truism: interest may or may not be accruing and if it is, Defendant will adjust the balance on Plaintiff’s account as it accrues. The language makes no definitive statement about whether interest has accrued or will necessarily be applied to the account in the future. It is a truthful, non-deceptive conditional statement."

With respect to the plaintiff’s claim that the defendant could not legally add interest to the debt, the Court found insufficient evidence for such claims, and dismissed her claims in this way:

"Plaintiff implictly concedes that Defendant could have served notice and then would have been able to collect interest. That means it was legally possible for LVNV to add interest to Plaintiff’s account prospectively (assuming it complied with the notice requirement), which dooms her claims that Defendant 'had no legal *** right to impose charge interest.'"

The plaintiff additionally asserts that the defendant violated two provisions of the ICAA by allegedly attempting to collect more that they were owed and misrepresenting the amount owed. The Court held that the plaintiff’s ICAA claims fail for the same reasons her FDCPA claims failed and must be dismissed.

insideARM Perspective

This ruling is a positive one for the industry, but the case also highlights the need for ARM industry firms to take care with the language used in letters sent to consumers.


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