The United States District Court for the Eastern District of New York recently found that a debt collector violated the Fair Debt Collection Practices Act (“FDCPA”) by sending a letter that offered settlement amounts if plaintiff paid by a certain date, but did not state that the debt would continue accruing interest and/or fees if plaintiff did not pay those amounts by the specified dates. See Cortez v. Foster & Garbus, LLP, 2019 WL 2443182 (E.D.N.Y. June 12, 2019). In the case, the defendant debt collector sent a letter to plaintiff that made three settlement offers to satisfy plaintiff’s debt if plaintiff made certain payments by certain dates. The letter did not inform the plaintiff that, if plaintiff did not make these payments by these dates, interest would continue to accrue. Defendant filed a motion for summary judgment.
The Court denied defendant’s motion for summary judgment. In Avila v. Riexinger & Associates, LLC, 817 F.3d 72 (2d Cir. 2016), the Second Circuit held that a debt collector violates the FDCPA if it fails to inform the debtor of accruing interest. Here, the Court found that “the notice here fails to warn consumers that they may fail to pay their debt in full, even if they pay the amount provided in the notice, if they do not make the payment by the specified date.” Based on this precedent, the Court denied the defendant’s motion for summary judgment and sua sponte granted summary judgment to plaintiff on the issue of liability.