Recent developments in the Second Circuit’s interpretation of the Fair Debt Collections Practices Act (FDCPA) have undermined the security of the safe harbor previously established by the court, and have created a situation whereby almost any debt collection letter is susceptible to claims that it violates FDCPA. The resulting confusion has resulted not only in a proliferation of FDCPA lawsuits, but has prevented debt collectors from knowing with any certainty what information they must convey to consumers, or what information they may convey to consumers. Ultimately, this lack of clear guidance harms the consumer, since debt collectors may convey either too little or too much information, potentially leaving consumers more confused than ever. Fortunately, the Second Circuit has ample opportunity to rectify the current situation and provide clear rules for all parties.
Enacted in 1978, the stated purpose of FDCPA is to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.” 15 U.S.C. §1692, et seq. To that end, FDCPA prohibits third-party debt collectors from making “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. §1692e. When determining whether a collection notice is “false, deceptive, or misleading,” courts of the Second Circuit judge the notice from the perspective of the “least sophisticated consumer,” meaning that a collection notice may be misleading if it is “open to more than one reasonable interpretation, at least one of which is inaccurate.” Avila v. Riexinger & Associates, 817 F.3d 72, 75 (2d Cir. 2016). The statute also requires debt collectors to provide the consumer with a written communication setting forth “the amount of the debt,” a seemingly simple provision that has turned into a minefield for collectors. 15 U.S.C. §1692g(a)(1).
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