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FDCPA Class Certified in E.D. Wisc. Based on Ambiguous Settlement Offer

Link: Al V. Van Ru Credit Corporation, Case No. 17-CV-1738-JPS-JPS (E.D. Wisc. Sept. 25, 2018).

Plaintiff, represented by Ademi & O’Reilly LLP, filed a class action under the Fair Debt Collection Practices Act based on the following language in a dunning letter:

You can settle your account with the above client for lees than the full amount you owe. The balance you owe as of the date of this letter is $462.31. Presently, we are willing to accept $277.39 to settle your account provided that you act promptly. We are not obligated to renew this offer.

The Letter does not define “promptly” and does not state a firm expiration date for the settlement offer. Id. Plaintiff’s overarching theory of liability is that failing to include a better description of the parameters of the settlement offer misleads the recipient into believing that the offer may shortly expire, when this is not true.

Judge J.P. Stadtmueller found that Plaintiffs met their burden under Rule 23 to certify the following class:

“(a) all natural persons in the State of Wisconsin (b) who were sent a collection letter in the form represented by Exhibit A to the complaint in this action, (c) seeking to collect a debt allegedly owed for personal, family or household purposes, (d) between December 13, 2016 and December 13, 2017, (e) that was not returned by the postal service.”

The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.

True, the FDCPA allows for individual recoveries of up to $1000 [(which is more than is usually obtained for individual class members)]. But this assumes that the plaintiff will be aware of her rights, willing to subject herself to all the burdens of suing and able to find an attorney willing to take her case. These are considerations that cannot be dismissed lightly in assessing whether a class action or a series of individual lawsuits would be more appropriate for pursuing the FDCPA’s objectives. Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997).

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