In a recent opinion issued by the U.S. District Court for the District of New Jersey in Benali v. Afni, Inc. (United States District Court, D. New Jersey, Case No. 15-3605), Judge Brian R. Martinotti granted a Motion for Summary Judgment in favor of defendant Afni, Inc., saying the collection agency did not violate the Fair Debt Collection Practices Act (FDCPA) because the plaintiff in the case didn’t have an account and thus didn’t have standing because it did not suffer an injury.

A copy of the opinion can be found here.


Defendant Afni was hired by AT&T to collect alleged debts owed to the company, and sent letters to consumers in an attempt to collect such debts. In the letters sent to plaintiff David Benali and “over 31,000 AT&T customers residing in New Jersey,” Afni disclosed the following:

“Payments made electronically to Afni may be subject to a $4.95 processing fee. Payment sent by mail are not subject to any processing fee.”

On May 29, 2015, Benali brought a class action suit against Afni, alleging that the defendant had “no legal or contractual right to charge a processing fee” for payments made electronically, while not charging any such fee for payments sent by mail.

In the complaint filed by Benali, there are inconsistencies regarding the account in question and who it belongs to, with references to the “Plaintiff’s Wireless Customer Agreement with AT&T,” yet the plaintiff’s counsel arguing that the “defendant provided the wireless card member agreement underlying this AT&T Debt. . . . My client did not sign that agreement. . . . My client has consistently maintained in this action that he has never had an account with AT&T.”

Benali filed a Motion for Summary Judgment, while AFNI filed a Cross-Motion for Summary Judgment.


Judge Martinotti noted that the plaintiff “has the initial burden of showing the basis for its motion,” and that ultimately “the only question to be resolved in this action is whether the Defendant’s actions, in attempting to charge a $4.95 processing fee to consumers paying their debts via credit card, violates the FDCPA.”

The plaintiff asserted that Afni’s action constitutes an FDCPA violation because the processing fee was not “expressly permitted by the contract creating the debt,” yet “it is undisputed, however, that Plaintiff never signed any agreement with AT&T, and Plaintiff concedes that ‘New Jersey state law neither affirmatively permits not expressly prohibits a processing fee for credit card payments.”

Afni argued the following based on Spokeo, Inc. v. Robins:

“Plaintiff has neither been harmed nor suffered an injury in fact and, thus, lacks Article II standing to maintain this action. (ECF No. 35 at 3.) Even assuming Plaintiff has standing, Defendant argues its reference to a processing fee in the Collection Letter is not a violation of the FDCPA because Plaintiff could have paid by mail without incurring a processing fee and, further, New Jersey law permits charging consumers processing fees so long as the consumers have another option to pay without incurring a fee.”

Considering this, AFNI asked for summary judgment because “Plaintiff has failed to meet his burden of showing the absence of a genuine issue of material fact and, further, lacks Article III standing for failing to demonstrate any concrete, particularized injury.”

In considering the facts of the case, Judge Martinotti agreed with AFNI’s interpretation of Spokeo and the FDCPA, concluding the following:

“In sum, Plaintiff admits he never suffered any actual harm as a result of Defendant’s alleged FDCPA violations, and the alleged risk of harm to the Plaintiff in this case is entirely conjectural or hypothetical. Because Plaintiff has not suffered an injury-in-fact he lacks Article III standing and this case must be dismissed accordingly for lack of subject matter jurisdiction.”

insideARM Perspective

This is a positive result for the ARM industry, which demonstrates that following Spokeo, plaintiffs will need to show actual harm done as a consequence of a defendant’s action, rather than using the barest of statutory explanations to justify a lawsuit.

Afni’s Chief Compliance Officer Alicia McKeighan issued the following statement on the case to insideARM:

“Afni has an unwavering commitment to compliance, and we are committed to defending cases that assist in clarification for the industry. The opinion in this case clarified that bare procedural requirements cannot give rise to class action claims. Benali, and similar cases, help us better understand what limits Spokeo can place on consumer litigation.”

Next Article: John McNamara Officially Joins CFPB Leadership Team