The Second Circuit Court of Appeals, came out with a decision in the case
of Avila v. RIEXINGER & ASSOCIATES, LLC, 817 F. 3d 72 – Court of
Appeals, 2nd Circuit 2016.
The Court held the following:
a collector sending a letter needs to disclose that the consumer’s balance
may increase due to interest and fees if the collection notice either
accurately informs the consumer that the amount of the debt stated in the
letter will increase over time, or clearly states that the holder of the debt
will accept payment of the amount set forth in full satisfaction of the debt
if payment is made by a specified date.
In simple terms, if there is going to be interest and late fees added to a
balance due on an alleged debt, the collector letter must state this fact.
A collection letter should use the following safe harbor information:
“As of today, [date], you owe $____ This amount consists of a principal of $____, accrued interest of $____, and fees of $____. This balance will continue to accrue interest after [date] at a rate of $____ per [day/week/month/year].”
In Connecticut, failure to properly disclose any fees and interest, which
continue to grow after the date of the letter will likely result in a Fair Debt
Collection Practices Act violation.
Attorney Robert M. Singer
Law Offices of Robert M. Singer, LLC
2572 Whitney Avenue
Hamden, CT 06518