On September 28, 2017, a federal judge in New York dismissed a putative class action against a debt collector accused of violating the Fair Debt Collection Practices Act (FDCPA). The sole basis for the action was the allegation that the debt collector misrepresented its rating with the Better Business Bureau (“BBB”) in a debt collection letter. The case is Bryan v. I.C. System, Inc. (Case No. 15-cv-6984, U.S.D.C., Eastern District of New York.)

A copy of the court’s order can be found here.  


Plaintiff, an individual residing in the State of New York, is a consumer as that term is defined by the FDCPA since she is allegedly obligated to pay a credit card debt. Defendant, I.C. System, Inc., a corporation with its principal place of business in St. Paul, Minnesota, is a debt collector within the meaning of the FDCPA since it is a debt collection agency. 

At some point prior to the commencement of this action, plaintiff allegedly incurred a credit card debt that was for “personal, family or household purposes.” In an effort to collect the outstanding debt, defendant sent plaintiff a letter on January 11, 2015 which stated:

Dear Elizabeth Bryan: 

Your delinquent account has been turned over to this collection agency. 

Tear off the bottom portion of this letter and return it with your payment. 

If you will be receiving a tax refund and would like to use it to pay your account, please call us to make payment arrangements. 


Beth Brown

In addition to the statutorily required validation of debt notice, the letter dated January 11, 2015 contained a prominent BBB logo next to the author’s signature with the statement: “I.C. System has a Better Business Bureau Rating of A+.” 

Plaintiff alleged, however, I.C. System falsely published in its collection letter that it had a BBB rating of “A+,” when in fact it had a rating of “B” at the time defendant mailed the letter. 

According to plaintiff, the BBB rated I.C. System with a “B” after receiving approximately 700 complaints in three years. Plaintiff alleges that defendant was aware of the complaints, was in continual contact with the BBB, knew or should have known what its rating was at any given time, but failed to correct the misrepresentation. 

As a result, plaintiff alleged that defendant’s collection letter violated Section 1692e of the FDCPA by misrepresenting that I.C. Systems had a BBB rating of A+ when it in fact did not. In addition, the plaintiff asserted that she brought this action as a purported class action on behalf of persons with New York addresses who were sent a collection letter by I.C. System that falsely stated that it had an A+ rating from the BBB. 

On August 9, 2016, defendant served, but did not file, a motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c). In response, on August 19, 2016, plaintiff filed a letter motion for leave to file an amended complaint pursuant to Rule 15(a) to add factual allegations. Defendant opposed the motion. 

On September 19, 2016, defendant filed a motion for judgment on the pleadings pursuant to Rule 12(c), which plaintiff opposed. On February 14, 2017, the district court referred defendant’s motion for judgment on the pleadings to Magistrate Judge Gary R. Brown. Judge Brown reviewed the plaintiff’s motion to amend the complaint and defendant’s motion for judgment on the pleadings, and concluded that resolution to the motion to amend was inextricably intertwined with defendant’s motion, and consolidated the two motions. 

On August 28, 2017, Magistrate Judge Brown filed his Report and Recommendation (the Report). Magistrate Judge Brown recommended: (i) that defendant’s motion for judgment on the pleadings be granted; and (ii) that plaintiff’s motion seeking leave to file an amended complaint be denied. 

Plaintiff filed a timely objection to Magistrate Judge Brown’s Report, to which defendant replied. 

The Court’s Decision 

The decision was rendered by the Honorable Sandra J. Feuerstein, United States District Court Judge. 

Judge Feuerstein wrote (Citations omitted): 

“Pursuant to 15 U.S.C. § 1692e, “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. Although 15 U.S.C. § 1692e identifies certain conduct that is considered “false, deceptive, or misleading,” the list is non-exhaustive. (“The sixteen subsections of § 1692e set forth a nonexhaustive list of practices that fall within this ban.”). Relevant here, one such example of false, deceptive, or misleading conduct proscribed by the FDCPA is “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” 

However, the Second Circuit has observed that, “[a]lthough it is clear that Congress painted with a broad brush in the FDCPA, not every technically false representation by a debt collector amounts to a violation of the FDCPA.” Therefore, “[m]any courts have read a materiality requirement into § 1692e.” In analyzing whether a misrepresentation is material, the Second Circuit has held that “communications and practices that could mislead a putative-debtor as to the nature and legal status of the underlying debt, or that could impede a consumer’s ability to respond to or dispute collection, violate the FDCPA.” 

Plaintiff’s allegations, accepted as true, are insufficient to state a claim arising under 15 U.S.C. § 1692e. According to Plaintiff, “Defendant falsely published an A+ rating to consumers, when its rating was not an A+, and defendant knew or should have known what it was.” 

Plaintiff’s allegations do not support an inference that the debt collection letter at issue in this action would be materially misleading to the least sophisticated consumer. 

For the reasons set forth herein, Magistrate Judge Brown’s August 28, 2017 Report and Recommendation in its entirety, and: (i) Defendant’s motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) is granted, and (ii) Plaintiff’s motion seeking leave to file an amended complaint pursuant to Fed. R. Civ. P. 15 is denied.” 

insideARM Perspective 

This case represents a no-nonsense consideration of the facts by both the Magistrate Judge and Judge Feuerstein. However, while the result was ultimately positive for the defendant, the cost of defense had to be significant. 

insideARM cautions compliance professionals regarding the inclusion of any logos or trade association emblems in letters to consumers. What purpose do they serve? insideARM would suggest that they are meaningless to most consumers and likely to draw attention from consumer attorneys and litigation defense costs. 

Additionally, ratings like the BBB rating can change. If a company is determined to include something like a BBB rating in a letter, what are the policies and procedures in place to change letters when ratings change?

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