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Collector’s Settlement Proposal Didn’t Violate FDCPA

  • Written by Shane Sexton

A U.S. magistrate judge has found that a collection agency did not violate the federal FDCPA by sending a letter to a debtor proposing to settle her debt for a portion of the stated balance while not specifying whether interest was accruing on the debt.

Defendant Sequium Asset Solutions, a Georgia-based collection agency, sent plaintiff Tracy Bertolino a letter in 2021 on behalf of its client debtholder Cach, LLC, offering to forgive 35 percent of the unpaid balance of Bertolino’s consumer debt if she agreed to a payment plan.

The letter listed $170,149.25 as the “total due” but did not specify if interest was accruing on the balance.

Bertolino, in a putative class action, argued that the absence of such information rendered the settlement letter false, deceptive and/or misleading under Section 1692e of the FDCPA and constituted an unfair or unconscionable means of collecting the outstanding debt under Section 1692f of the statute.

But in a case of first impression in the 1st Circuit, Judge Judith Dein granted Sequium’s motion for judgment on the pleadings.

“As the Second Circuit explained … collection notices that offer to settle a judgment debt for a sum certain ‘do not present the risk that a debtor might pay the listed balance only to find herself still owing more. Payment of an amount that the collector indicates will fully satisfy a debt excludes the possibility of further debt to pay,’” Dein wrote, applying Cortez v. Forster & Garbus, a 2021 decision from the 2nd U.S. Circuit Court of Appeals. “Such an offer, ‘when viewed from the perspective of the least sophisticated consumer,’ can ‘only reasonably be read one way: as extending an offer to clear the outstanding debt upon payment of the specified amount(s) by the specified date(s).’”

The 15-page decision is Bertolino v. Sequium Asset Solutions, LLC, Lawyers Weekly No. 02-177-23.

Sensible decision

Bertolino’s attorneys, Scott J. Bernstein and Robert Yusko, of New Jersey, could not be reached for comment prior to deadline. Defense counsel John J. O’Connor of Boston also could not be contacted.

However, other attorneys who handle disputes over debt collection practices said they were not surprised by the decision.

Steven S. Broadley of Boston, who defends debt collectors, said the plaintiff seemed to be trying to stretch a very simple factual situation to make it appear complicated.

“The situation and the letter were direct and clear,” Broadley said. “The only way to argue that a specific offer to settle for a specific amount is not clear is to make up possibilities which are not part of the letter. … A plaintiff is not entitled to find liability under the FDCPA by presenting arguments that are implausible, since even the least sophisticated consumer is required to read with some care and not make up bizarre interpretations of simple and direct language.”  Too read more...