3rd Cir. Holds No FDCPA Violation When Non-Interest-Bearing Debt Itemized ‘$0.00’ for Interest

The U.S. Court of Appeals for the Third Circuit recently affirmed the dismissal of a class action complaint alleging that a collection letter’s itemization of a debt as including “$0.00” in interest and fees — when the debt could not accrue interest or fees — violated the federal Fair Debt Collection Practices Act.

In so ruling, the Third Circuit concluded that the inclusion of line items listing $0.00 in the form letter’s interest and fees columns did not mislead the consumer to believe that he may owe interest or fees in the future in violation of the FDCPA’s prohibition on deceptive (§ 1692e) and unfair or unconscionable (§ 1692f) means of collecting consumer debts, even under the court’s hypothetical “least sophisticated consumer” standard.

Of note, the federal Consumer Financial Protection Bureau filed an amicus brief in support of the debt collector and the creditor in this appeal. The Third Circuit noted that the CFPB’s recently finalized Regulation F to the FDCPA “seemingly condone[s] itemizing interest and fees as [the debt collector] did. … Under the pending rules, debt collectors must include in certain notices a table showing the interest, fees, payments, and credits that have been applied—even if none have actually been applied—to a consumer’s debt since the itemization date. … And ‘a debt collector may indicate that the value of a required field is ‘0,’ ‘none,’ or may state that no interest, fees, payments, or credits have been assessed or applied to the debt.’”

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