CHICAGO — Saying the debt collector's letter was "materially misleading," a Chicago federal judge has given the green light to a lawsuit brought by a woman who accused a collection firm of failing to itemize fees and other charges tacked on to an alleged debt owed to a car rental company.
On Aug. 6, U.S. District Judge Edmond E. Chang denied a motion to dismiss the complaint brought by plaintiff Erin Vogel against McCarthy, Burgess & Wolff Inc. (MBW) for alleged false or misleading practices in its initial letter to her.
The violations alleged against MBW under the Fair Debt Collection Practices Act (FDCPA) included that the firm failed to itemize “obscure elements” of Vogel’s debt in the “initial letter” sent to her. The letter alleged debt was accrued from Payless Car Rental in the amount of $3,036.
In his 11-page opinion, Judge Chang noted the plaintiff disputed the charges of the initial letter, “following the instructions in the initial letter.” The defendant, according to the court filing, “responded with a debt verification letter.”
The second letter included an itemized receipt that broke down the total amount of debt. The itemizations were $789 in “miscellaneous charges,” $385 for a “late fee” and $582.75 in “optional services.”
The plaintiff sued MBW, alleging the firm violated the FDCPA, which prohibits the "false representation of … the character, amount, or legal status of any debt."
Chang stated that the “lack of itemization” in the first letter limited “Vogel’s ability to understand and challenge the validity of the individual charges,” from the court’s “unsophisticated consumer” standpoint rule.
Further, the document noted that although principal amounts and interest “need not be broken out in a dunning letter, because even an unsophisticated consumer can understand the total amount due includes both principal and interest,” the same “cannot be said for fees and other additional charges—even ones explicitly agreed to at some point.”
Chang also stated: “Vogel might have never known of that potentially inflated addition [if that is what it is] to her original debt if she had never disputed the amount and seen the itemized breakdown.”
Chang alleged the letter was “materially misleading.”
Vogel is represented in the action by attorneys Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Cassandra P. Miller, Corey J. Varma and Paul M. Waldera, of the firm of Edelman, Combs, Latturner & Goodwin LLC, of Chicago.
MBW is represented by attorneys Randi Lynn Nine and Francis C. Rowland, of MBW, of Chicago.
U.S. District Court for the Northern District of Illinois, Eastern Division case number 17 C 6681