After several years of litigation—including multiple rounds with the Second Circuit Court of Appeals—the interest disclosure cases have carved out their own set of nuanced rules. There is safe harbor language, rules about when it can and cannot be used, rules about estimated amounts due, and a winding vine of intricacies that connect each of these depending on which jurisdiction is reviewing the case. [Editor's Note: You can track these trends with an "interest disclosure" issue-specific search in the iA Case Law Tracker!]
The Eastern District of Pennsylvania threw its hat into the race of adding yet another rule created by case law on this issue in Gardner v. Weltman, Winberg & Reis Co., No. 19-cv-2179 (E.D. Pa. Oct. 24, 2019).
In Gardner, the consumer filed a Fair Debt Collection Practices Act (FDCPA) claim alleging that a collection letter, which stated "balance due as of 02/12/2019," was false and misleading because it would make a least sophisticated consumer think that the balance would increase after that date despite the account no longer accruing interest.
The court didn't bite, and instead granted Weltman's motion for judgment on the pleadings. The court noted that nowhere in the letter was there a disclosure that the balance would increase or that interest was accruing on the account. The court likened the "balance due as of" statement with the "current balance" statement in the Seventh Circuit Court of Appeals case of Koehn v. Delta Outsource Grp., Inc., No. 19-1088 (7th Cir. Sept 25, 2019), which the Seventh Circuit found did not imply that interest would accrue on the account.
The court went on to state, again citing Koehn:
[C]ollection letters are not required to answer all possible questions about the future... A collection letter does not violate the FDCP A simply because a lawyer is able to point out a question the letter does not expressly answer.
Further, an unsophisticated consumer is not a gifted linguist who closely parses a debt collection letter like a Wall Street lawyer analyzes a municipal bond offering or like a patent lawyer construes a patent.
(Internal citations and quotations omitted.)
There you have it, folks. Yet another addition to the web of rules revolving around interest disclosures.
Want to untangle the web of interest disclosure requirements? The iA's Case Law Tracker can help you keep up and conduct incisive and quick legal research in less time than it takes to pour your morning cup of coffee.