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FDCPA Case Law Does Not Attribute Least Sophisticated Debtor Simultaneous Naïveté and Heightened Discernment

  • Written by Steel Rose

 In Hopkins v. Collecto, Inc., 994 F.3d 117 the Third Circuit affirmed the dismissal of a class action complaint alleging that a collection letter’s itemization of a debt as including “$0.00” in interest and fees — when the debt could not accrue interest or fees — violated the FDCPA.

In so ruling, the Third Circuit concluded that the inclusion of line items listing $0.00 in the form letter’s interest and fees columns did not mislead the consumer to believe that he may owe interest or fees in the future in violation of the FDCPA.

Specifically, the plaintiff had alleged that because the debt was static and purportedly could not accrue interest or fees, that assigning a “$0.00” value to those columns falsely implied that interest and fees could accrue and increase the total debt over time.

Joining the Fifth and Sixth Circuits which had both already weighed on similar claims, the Court rejected that the type of consumer the FDCPA has been interpreted to seek to protect would be misled holding that even the least sophisticated consumer “reads a debt collection letter without speculating about what could happen in the future based on true statements concerning the past.”

Noting that the plaintiff had alleged that the letter was a “mass-produced, computer-generated form letter” the Court explained that “[t]o see $0.00 in each of the form letter’s interest and fees columns, and yet fail to understand that they are inapplicable vestiges of a template letter, is to be callow to an unrealistic and fanciful degree. And yet, as [plaintiff] tells it, this same person is also shrewdly speculative — extrapolating that he or she needs to pay off the debt post haste because interest and penalties are materially likely to accrue in the future. Our FDCPA case law does not support attributing to the least sophisticated debtor simultaneous naïveté and heightened discernment.” For 2021’s Top Consumer Credit Decisions From the 3rd Circuit ckick here.