Debt Collector's Inclusion Of Past Accumulated Interest In "Amount Due" Rather Than "Interest Due" Is Not False And Not A Violation Of The FDCPA
HAHN v. TRIUMPH PARTNERSHIPS LLC (March 4, 2009)
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Triumph Partnerships acquired some overdue credit card debt from a bank, including a debt owed by Marylou Hahn. Triumph sent a letter to Hahn, stating that she had an "amount due" of $1051.91 and that she had "interest due" of $82.64. Hahn filed suit under the Fair Debt Collection Practices Act. Hahn alleged, and Triumph conceded, that the $82.64 represented the interest that had accrued only since Triumph acquired the debt. The $1051.91 included interest that had accrued prior to Triumph's acquisition of the debt. Hahn alleged, therefore, that the statement was a false representation of the debt and prohibited by the Fair Debt Collection Practices Act. The District Court granted summary judgment to Triumph. Hahn appeals.
In their opinion, Chief Judge Easterbrook and Judges Flaum and Manion affirmed. The Court concluded that the letter contained no false representation. It held that an “amount” that is due can include principle, interest and other components. The Court specifically pointed out that the letter did not assert that the $82.64 was the totality of the interest that had accrued on the debt since its inception. Since the statement was not false, the Court held that it does not violate the Fair Debt Collection Practices Act. Alternatively, the court affirmed on the ground that the statement was immaterial. The Court held that materiality is an element in a §1692e action. Since the letter accurately reported the debt and accurately computed the debt, whether it segregated the post-acquisition interest was immaterial.
Michael Rigney practices in the law offices of GVC Ltd. in Chicago. In this blog, he reports on select