The question of whether it's okay if a debt collector can include language in its letter that the creditor may take legal action at some point in the future reared its head in the Southern District of New York (S.D.N.Y.)—and the result was favorable to the debt collector. The court dismissed the case.


What Happened?

In Rosenberg v. Client Servs., Inc., (S.D.N.Y. May 26, 2020), the debt collector defendant sent a letter to the plaintiff that contained the following language, "Capital One will send your account to an attorney...for possible legal actions. Please note, no decision has been made to take legal action against you at this time. I want to help you avoid any possible legal action." The letter then included the debt collector's telephone number. The following paragraph in the letter contained the validation rights language required by section 1692g of the Fair Debt Collection Practices Act (FDCPA).

The plaintiff sued, presenting three different arguments:

  1. That the letter improperly threatened litigation against the consumer;
  2. That the letter falsely represented the status of the debt, as a legal action notice was premature at this stage of the debt's lifecycle; and
  3. That the legal action notice overshadowed the consumer's validation rights.

The Court Dismissed the Entire Case

The court was not convinced by any of the plaintiff's arguments. 

First, the court found that the threat of litigation claim fails. While the palintiff attempts to read only snippets of the letter to make the proverbial glove fit, the court notes that the letter as a whole—heck, even just the legal action notice read as a whole—tells a different story. Nothing in the legal action notice states that legal action is imminent. Instead, the notice clearly states repeatedly that legal action by the creditor is congingent upon several things (no resolution with the debt collector, an attorney's review of the account, etc.). 

The court noted that even if the language was deemed to be an imminent threat of litigation—which it is not—the claims fails as plaintiff failed to allege that such a threat would be false.

Second, with similar reasoning as the question of imminency above, the court likewise found that the legal action notice was not premature. Again, the disclosure provided the applicable contingencies, and a collection letter can include potential remedies.

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Third, the court rejected the overshadowing argument. The court found that the legal action notice was in the same size and typeface as the validation rights paragraph, so the format of the letter wasn't overshadowing. The court found no overshadowing issues with the inclusion of a telephone number, as it merely encourages communication with the debt collector. And, finally, the court found that the legal action notice, since it does not imply imminence, it did not somehow overshadow a consumer's right to proceed with disputing the debt in the validation window. 

The court dismissed the complaint and closed the case.


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