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Taylor v. Financial Recovery Services, Inc.

United States District Court, S.D. New York

May 18, 2017

CHRISTINE TAYLOR, et al., Plaintiffs,
v.
FINANCIAL RECOVERY SERVICES, INC., Defendant.

          OPINION AND ORDER

          Lorna G. Schofield United States District Judge.

         Plaintiffs Christine Taylor and Christina Klein allege that Defendant Financial Recovery Services, Inc. (“FRS”) violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. The parties cross-move for summary judgment. For the following reasons, summary judgment is granted in Defendant's favor.

         I. BACKGROUND

         The following uncontested facts are taken from the parties' 56.1 Statements and materials submitted on this motion.

         A. Plaintiff Christine Taylor

         In 2010, Taylor opened a credit card account, which she used to buy personal and household items. After she defaulted on her credit card payments in 2015, the balance due on her credit card statement increased each month due to interest and fees.

         In March 2016, the First National Bank of Omaha, which owned Taylor's credit card debt, referred her account to FRS for collection. FRS sent Taylor three letters approximately a month apart regarding her credit card debt. None of the letters refers to interest or fees.

         FRS's first letter to Taylor, dated March 8, 2016, states the amount $599.98 six times on the one-page document. The upper right hand corner contains information about the debt, including “AMOUNT DUE AS OF CHARGE-OFF: $599.98” and “BALANCE DUE: $599.98.” The body of the letter states that Taylor's account has “been assigned to this agency for collection. We [FRS] are a professional collection agency attempting to collect a debt . . . . You owe $599.98.” The bottom consists of three payment coupons, each of which states, “Current Balance: $599.98.”

         The second and third letters, dated April 12 and May 10, 2016, respectively, each state the amount $599.98 multiple times. Like the first letter, both again say in the upper right corner “BALANCE DUE: $599.98.” Both contain three payment coupons, all of which again say “Current Balance $599.98.” The second letter states, “As of the date of this notice you owe $599.98.” It also provides that Taylor could “settle [her] account” for less than $599.98 by making one lump sum payment by a certain date or making installment payments on the timeline provided in the letter. The letter elaborates, “This settlement may have tax consequences. Please consult your tax advisor.” The third letter also includes a settlement offer, providing that FRS could “accept a settlement on [Taylor's account] for $299.99.” As with the April letter, it provides: “This settlement may have tax consequences. Please consult your tax advisor.”

         B. Plaintiff Christina Klein

         Klein obtained a credit card from Barclays Bank (“Barclays”), which she used to make purchases for personal or household use. Around the beginning of 2014, she defaulted on her payments to Barclays. Klein attests that every month that she did not make a full payment, interest and late fees were added to the balance on her Barclays credit card statement.

         In October 2015, Barclays referred Klein's account to FRS for collection. FRS sent Klein four letters approximately a month apart regarding her credit card debt. None of the letters refers to interest or fees.

         FRS's first letter to Klein, dated October 2, 2015, states in the upper right corner, “AMOUNT DUE AS OF CHARGE OFF: $3171.12” and “BALANCE DUE: $3171.12.” The body of the letter states that Klein's account has “been assigned to this agency for collection. We [FRS] are a professional collection agency attempting to collect a debt . . . . You owe $3171.12.” The bottom of the letter consists of three payment coupons each of which says “Current Balance: $3171.12.” FRS also sent Klein letters in November 2015, December 2015 and January 2016. These subsequent letters state in the upper right corner “BALANCE DUE: $3171.12, ” and each letter contains the three payment coupons, each stating “Current Balance: $3171.12.” The January letter also states in the text, “As of the date of this notice you owe $3171.12. We are authorized to settle the above listed account(s) at a substantial reduction to you . . . .”

         In April 2016, Klein filed a voluntary petition for bankruptcy under Chapter 7 of the United States Bankruptcy Code. On Schedule A/B of the Form 106A/B, she listed “Possible FDCPA claims” in the amount of $1, 000. The bankruptcy court discharged her debts in July 2016, which is ...


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