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D’Addario v. Enhanced Recovery Company, LLC

798 F. Supp.2d 570 (D. N.J. 2011)

FDCPA — Nothing in the Fair Debt Collection Practices Acts prohibits settlement of a debt within the debt validation period.

A debt collector sent a letter to a consumer. The letter offered the debtor a repayment opportunity on a debt that he owed. The first of several options offered in the letter involved a settlement by making payment within the time period during which the debtor could have disputed the debt. The letter also told the debtor to see the reverse side for important notices and consumer rights. One of the rights granted to the consumer was his right to dispute the debt within thirty days after receiving the letter. The consumer claimed that, because the deadline for payment fell within the time period in which he could have disputed the debt, the letter was a misleading and inaccurate demand for payment. As such, he alleged the letter violated the Fair Debt Collections Practice (FDCPA). The debt collector moved to dismiss the case for failure to state a claim upon which relief could be granted.

The FDCPA states that a debt collector may not use any false, deceptive or misleading representation or means in connection with the collection of any debt. It is considered deceptive if the communication can be reasonably read to have two different meanings, one which is inaccurate. When determining if a communication is deceptive, a Court is required to adopt the point of view of the least sophisticated debtor.

Even when viewing the issue from this lower standard, the Court disagreed with the consumer that the letter was misleading. It held that nothing in the statute prohibited settlement of the debt within the validation period. Additionally, the Court stated that “even the least sophisticated debtor could not believe that the letter presented him with an ‘either/or’ proposition – i.e., either dispute the debt’s validity or pay off the debt, but not both.” The letter did not emphasize one option over the other. The Court also noted that the letter contained no threats or demands and did “not even suggest the possibility of legal action on the debt.”

The Court therefore concluded that the letter at issue was a permissible settlement offer and not a misleading demand for payment. Thus, the debt collector’s motion was granted.

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