EDNY: Avila and NYDFS Requirements Collide

Debt collectors must navigate the murky waters of complying with many letter disclosure requirements. In a jurisdiction like New York, where the court dockets are chock full of FDCPA claims and the Department of Financial Services (NYDFS) established a set of debt collection rules, a collision of requirements is inevitable. In a recent decision, the Eastern District of New York was faced with this issue. 

In Polak v. Kirschenbaum & Phillips, P.C., 2018 WL 1189337 (E.D.N.Y. Feb. 16, 2018), the court denied a motion to dismiss a claim that a letter violates the FDCPA because it includes a disclosure that interest may accrue (as allegedly required by Avila) while also stating that zero interest accrued since charge off (as required by NYDFS).  

By denying the motion to dismiss, the court found that the allegations are sufficient to state a claim that including such a combination of disclosures makes the letter misleading.  Interestingly enough, the letter in question is exactly what consumer attorneys argued for in the Taylor v. Financial Recovery Services 2nd Circuit appeal. 

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