Campbell ex rel. J.C. v. MBI Associates, Inc.
98 F. Supp. 3d 568
E.D.N.Y2015Background
- Plaintiff Kewanda Campbell received form collection letters from debt collector MBI on behalf of The Methodist Hospital; letters stated “There will be a $5.00 processing fee for all credit cards.”
- MBI sent a similar letter to Campbell’s two‑year‑old son J.C.; hospital records listed J.C. as the patient and Campbell as guarantor.
- Campbell (through counsel Puglisi) sent a representation/dispute letter to MBI; MBI thereafter sent a confirmation/acknowledgment (the “Third Letter”) to Campbell.
- MBI admits it charged a $5 processing fee to offset card‑processor charges (sometimes waived) and that the Third Letter was mistakenly sent after notice of counsel.
- Plaintiffs sued under the FDCPA (15 U.S.C. §§1692e, 1692f, 1692c) and New York GBL §349; parties cross‑moved for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $5 processing fee statement violated §1692f(1)/§1692e | Fee not contractually authorized or permitted by law; stating it was collectible violates §1692f(1) and §1692e(2) | Fee was optional; may be a pass‑through or used to offset costs; courts consider various factors; not necessarily unauthorized conduct | Court granted summary judgment to plaintiffs: statement violated §1692f(1) (or at least §1692f) and §1692e(2) because fee was not contractually or statutorily authorized |
| Whether MBI’s Third Letter violated §1692c(a)(2) (communication after notice of representation) | Third Letter was communication in connection with collection after notice of counsel, violating §1692c(a)(2) | Letter acknowledged dispute and was not a collection attempt; any violation was unintentional/de minimis | Court granted summary judgment to plaintiffs on §1692c(a)(2) liability (leaving damages issues for later) |
| Whether sending a dunning letter to minor J.C. violated §1692e provisions | Sending collection letter to a non‑debtor/minor was a false representation of legal status of the debt | MBI reasonably relied on hospital records showing J.C. as patient and Campbell as guarantor; no evidence MBI knew J.C. was not the debtor | Court granted summary judgment to defendant on the third cause: plaintiffs failed to show MBI knowingly dunned the wrong person |
| Whether letters violated New York GBL §349 (consumer‑oriented deception) | Letters with the $5 fee and the practice of contacting represented consumers are consumer‑oriented deceptive practices | Fee disclosure was unambiguous; MBI has policy to honor counsel and the Third Letter was a mistake; plaintiffs lack proof of material injury | Court denied summary judgment to both sides on §349 claim (genuine issues remain); MBI’s practice‑of‑contacting counsel allegation insufficiently shown |
Key Cases Cited
- Jacobson v. Healthcare Fin. Svcs., 516 F.3d 85 (2d Cir. 2008) (FDCPA purpose and standard)
- Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) (least‑sophisticated‑consumer standard)
- Tuttle v. Equifax Check, 190 F.3d 9 (2d Cir. 1999) (service‑charge rule under §1692f(1): allowed only if contract or law permits)
- Quinteros v. MBI Associates, Inc., 999 F. Supp. 2d 434 (E.D.N.Y. 2014) (same defendant; §1692f(1) claim over $5 processing fee survived motion to dismiss)
- Shami v. Nat’l Enter. Sys., 914 F. Supp. 2d 353 (E.D.N.Y. 2012) (treatment of transaction‑fee language; distinctions where fee collected by third party)
- Ellis v. Solomon & Solomon, P.C., 591 F.3d 130 (2d Cir. 2010) (least‑sophisticated consumer defined)
- Schweizer v. Trans Union Corp., 136 F.3d 233 (2d Cir. 1998) (§1692f subsections as specific examples of unfair collection)