The Third Circuit Court of Appeals recently concluded that a demand for a specific amount of attorneys’ fees in a complaint before the fees have actually been incurred is an “actionable misrepresentation under the Fair Debt Collection Practices Act” (“FDCPA”). In Dale Kaymark et al. v. Bank of America and Udren Law Offices PC, the plaintiff claimed that an itemized list of total debt in the foreclosure complaint improperly included $1,650 in attorneys’ fees, not all of which had been incurred. The district court dismissed the FDCPA claim on the grounds that legal pleadings were not subject to the section of the FDCPA at issue. On appeal, the Third Circuit was not persuaded that formal pleadings filed by attorneys are exempt from the FDCPA’s requirement that debt collectors must not use any "false, deceptive or misleading representation or means in connection with the collection of any debt." Instead, subject to very limited and express exceptions, "all litigation activities, including formal pleadings, are subject to the FDCPA." When drafting demand letters and complaints, creditors must be cautious when demanding fees from the debtor which the creditor has not yet incurred. Although creditors are not barred from listing an estimate of anticipated fees in their demand letter or complaint, they must do so explicitly. Otherwise, the debtor might assume that the amounts listed as “due” are, in fact, due as of a particular date.
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