Quinteros v. MBI Associates, Inc., 999 F. Supp. 434

Plaintiff (New York consumer) received a February 22, 2012 debt-collection letter from MBI seeking payment for an alleged debt and stating: “There will be a $5.00 processing fee for all credit cards or checks over the phone.”
The letter included a detachable payment form and also warned of a $20 service charge for returned checks.
Plaintiff sued under the FDCPA, alleging violations of 15 U.S.C. § 1692f(1) (collection of amounts not authorized by contract or law) and § 1692e(2) (false or misleading representations about compensation collectable).
Defendant moved to dismiss under Rule 12(b)(6), arguing the $5 processing fee was non-abusive, optional, and disclosed, and thus not proscribed by the FDCPA; it also relied on the Sixth Circuit’s Lee decision.
The court construed the complaint in Plaintiff’s favor, applied the ‘‘least sophisticated consumer’’ standard, and considered whether the fee was incidental to the debt and unauthorized by contract or law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a $5 processing fee for phone/online credit-card or check payments violates 15 U.S.C. § 1692f(1)	Quinteros: fee is an incidental charge not authorized by the underlying agreement or law, so its collection is prohibited	MBI: fee is optional, disclosed, non-abusive, and therefore not barred by § 1692f(1)	Denied dismissal — fee is "incidental" under § 1692f(1); because not shown to be contractually or legally authorized, claim survives
Whether stating the processing fee violated 15 U.S.C. § 1692e(2) as a false or misleading implication of entitlement to collect compensation	Quinteros: disclosure falsely implies MBI lawfully may collect the fee; if § 1692f(1) violation stands, § 1692e(2) is implicated	MBI: accurate disclosure of fee is permissible; Shami and Lee distinguishable	Denied dismissal — because § 1692f(1) claim survives, the statement implying entitlement to collect also states a plausible § 1692e(2) claim

Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: plausibility)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard guidance)
Chambers v. Time Warner, 282 F.3d 147 (2d Cir. 2002) (pleading: factual allegations accepted as true on motion to dismiss)
Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) (least sophisticated consumer standard)
Greco v. Trauner, Cohen & Thomas, L.L.P., 412 F.3d 360 (2d Cir. 2005) (applying least sophisticated consumer view to collection letters)
Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85 (2d Cir. 2008) (scope of least sophisticated consumer protection)
Tuttle v. Equifax Check, 190 F.3d 9 (2d Cir. 1999) (application of § 1692f(1) to service charges and state-law framework)
Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22 (2d Cir. 1989) (broad construction of FDCPA)
Kropelnicki v. Siegel, 290 F.3d 118 (2d Cir. 2002) (legislative history describing abusive collection practices)
Lee v. Main Accounts, Inc., 125 F.3d 855 (6th Cir. 1997) (optional third-party card fee; distinguishable where fee paid to third party)
Consumer Prod. Safety Comm’n v. GTE Sylvania, 447 U.S. 102 (statutory interpretation starts with text)
Shami v. Nat’l Enterprise Sys., 914 F. Supp. 2d 353 (E.D.N.Y. 2012) (E.D.N.Y. decision applying § 1692f(1) and § 1692e(2) to optional processing fee; persuasive precedent relied upon)