Collector - July 2018 - 50

IAP

Second Circuit Rules for Accounts Receivable
Management Industry in Case Supported by
ACA's Industry Advancement Program
The appellate court ruled in a "reverse-Avila" case, holding that a debt collector is not
required to disclose that interest is not accruing.
By Karen Scheibe Eliason

T

he Second Circuit Court of Appeals
issued a unanimous opinion in April
in favor of an ACA International
member collection agency in the case of
Taylor v. Financial Recovery Services, Inc.,
No. 17-1650, 2018 WL ------- (2nd Cir. March
29, 2018). The issue in Taylor was "whether it
is misleading within the meaning of Section
1692e for a debt collection letter to state the
amount of a debt without disclosing that the
debt, which once accrued interest or fees, no
longer does so."
The Second Circuit ruled "that a
collection notice that fails to disclose that
interest and fees are not currently accruing
on a debt is not misleading within the
meaning of Section 1692e."

50

Given that consumer attorneys have filed
hundreds of cases in federal courts against
collection agencies (mostly ACA members)
asserting that it is a violation of the Fair
Debt Collection Practices Act for a debt
collector to fail to disclose in a collection
letter that interest is not accruing, ACA not
only awarded Industry Advancement Funds
to its member to help defray legal expenses
associated with opposing the consumer's
appeal of the district court's decision in Taylor,
the association also filed an amicus brief with
the Second Circuit on Jan. 22, 2018.
On March 22, 2016, the Second Circuit
Court of Appeals issued its ruling in Avila
v. Riexinger & Assocs, LLC 817 F.3d 72 (2d
Cir. 2016), holding that a debt collector must

disclose in collection letters that interest
is accruing on an account. Following the
Avila ruling, the consumer in the Taylor case
filed a lawsuit against the collection agency
claiming it violated the FDCPA by failing to
disclose in collection letters that interest was
not accruing on the consumer's account.
The U.S. District Court for the Southern
District of New York ruled in favor of the
collection agency on a motion for summary
judgment, holding that a debt collector is
not required to disclose that interest is not
accruing (where no interest is accruing).
The consumer appealed the order granting
summary judgment to the Second Circuit.
The consumer claimed that the Second
Circuit's holding in Avila supported her
argument that a "debt collector commits a
per se violation of Section 1692e whenever
it fails to disclose whether interest or fees
are accruing on a debt" because the least
sophisticated consumer could interpret the
lack of such disclosure to mean either that
interest and fees on the debts in question are
accruing or that they are not accruing.
On appeal, the Second Circuit affirmed
the district court's decision. In doing so,
the Second Circuit rejected the consumer's
attempt to extend Avila's holding.
The appellate court explained,
"[i]n Avila, we found a collection notice
to be misleading because '[a] reasonable
consumer could read the notice and be
misled into believing that she could pay
her debt in full by paying the amount listed
on the notice,' whereas, in reality, such a
payment would not settle the debt. 'The
debt collector could still seek the interest
and fees that accumulated after the notice

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Table of Contents for the Digital Edition of Collector - July 2018

Upfront
Industry News
Best Practices
FYI
Collection Tips
Navigating Uncharted Territory
Making Sense Out of Collection Notice Requirements
Do You Need to Contact Creditors to Verify a Debt?
Calendar
Honor Roll
Getting on the Right Path
A Better Framework
ACA Members Contribute to Successful Collectors Challenge Month
The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Connecting with Legislators at ACA’s Washington Insights Conference
Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Compliance
ACA SearchPoint
Ad Index
Last Word
Collector - July 2018 - Cover1
Collector - July 2018 - Cover2
Collector - July 2018 - 1
Collector - July 2018 - 2
Collector - July 2018 - 3
Collector - July 2018 - Upfront
Collector - July 2018 - 5
Collector - July 2018 - Industry News
Collector - July 2018 - 7
Collector - July 2018 - 8
Collector - July 2018 - 9
Collector - July 2018 - Best Practices
Collector - July 2018 - 11
Collector - July 2018 - FYI
Collector - July 2018 - 13
Collector - July 2018 - Collection Tips
Collector - July 2018 - 15
Collector - July 2018 - Navigating Uncharted Territory
Collector - July 2018 - 17
Collector - July 2018 - 18
Collector - July 2018 - 19
Collector - July 2018 - 20
Collector - July 2018 - 21
Collector - July 2018 - 22
Collector - July 2018 - 23
Collector - July 2018 - Making Sense Out of Collection Notice Requirements
Collector - July 2018 - 25
Collector - July 2018 - 26
Collector - July 2018 - 27
Collector - July 2018 - 28
Collector - July 2018 - 29
Collector - July 2018 - Do You Need to Contact Creditors to Verify a Debt?
Collector - July 2018 - 31
Collector - July 2018 - 32
Collector - July 2018 - 33
Collector - July 2018 - 34
Collector - July 2018 - 35
Collector - July 2018 - Calendar
Collector - July 2018 - Honor Roll
Collector - July 2018 - Getting on the Right Path
Collector - July 2018 - 39
Collector - July 2018 - A Better Framework
Collector - July 2018 - 41
Collector - July 2018 - ACA Members Contribute to Successful Collectors Challenge Month
Collector - July 2018 - 43
Collector - July 2018 - 44
Collector - July 2018 - 45
Collector - July 2018 - The ACA Int’l v. FCC Decision: What Does It Mean For Your Business?
Collector - July 2018 - 47
Collector - July 2018 - Connecting with Legislators at ACA’s Washington Insights Conference
Collector - July 2018 - 49
Collector - July 2018 - Second Circuit Rules for Accounts Receivable Management Industry in Case Supported by ACA’s Industry Advancement Program
Collector - July 2018 - 51
Collector - July 2018 - Compliance
Collector - July 2018 - 53
Collector - July 2018 - ACA SearchPoint
Collector - July 2018 - Ad Index
Collector - July 2018 - Last Word
Collector - July 2018 - Cover3
Collector - July 2018 - Cover4
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