Second Circuit Revives FDCPA Class Action

Case: Hart v. FCI Lender Services, Inc.

Issue: Whether FCI Lender Services’ disputed mortgage servicing letters were sent “in connection with the collection of any debt” under the Fair Debt Collection Practices Act (FDCPA).

Case Summary: The Second Circuit reversed a New York district court decision in holding that FCI Lender Services (FCI) violated the FDCPA by sending a servicing transfer notice that did not contain the disclosures required under the FDCPA.

Plaintiff Michael J. Hart filed a class action against FCI alleging it violated the FDCPA by sending him two mortgage servicing letters that failed to provide him sufficient notice. Specifically, one letter said FCI assumed mortgage servicing responsibilities related to Hart’s mortgage loan, and the other letter was a payment statement that said Hart could dispute any payments of debt he owed within 30 days. According to Hart, both the letters included specific references to the FDCPA. FCI contended that letters were required servicing transfer notices under the Real Estate Settlement Procedures Act (RESPA).

On appeal, the Second Circuit reversed. The Court ruled that the plaintiffs sufficiently pled that the letters were subject to the FDCPA because “a reasonable consumer would credit the letter’s warning, its instruction to take action within [30] days and its statement that it represents an attempt to collect a debt.” In dismissing FCI’s argument that the letters were mandated RESPA notices, the Court clarified that the letters “could serve more than one purpose in any event,” and consumers could believe they were sent to collect debt.

Bottom Line: The Second Circuit declared that the Court’s ruling is the first to address the scope of the FDCPA’s “in connection with the collection of any debt” language.

About Thomas Pinder

Thomas Pinder
Thomas Pinder is senior vice president and senior counsel for litigation in the office of ABA's general counsel.
More from Thomas Pinder >