Shami v. National Enterprise Systems
2012 U.S. Dist. LEXIS 182349
E.D.N.Y2012Background
- Shami is a New York consumer; NES is a debt collector.
- Bank of America referred Shami’s account for $5,410.69 to NES on Oct 4, 2008.
- NES sent a Collection Letter on Oct 6, 2008 stating a fee for using the automated system or internet.
- ITS (formerly ITS) processes payments for NES; ITS charges the service fee and retains it.
- NES contends ITS collects the fee, NES does not receive any portion; plaintiff disputes this but evidence supports third‑party collection.
- Court granted NES summary judgment on both FDCPA claims §1692f(l) and §1692e.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the online/phone payment fee violates §1692f(l). | Shami argues NES collects or shares the fee. | ITS, not NES, collects/retains the fees. | No violation; fee is charged by a third party; no genuine issue as to who collected the fee. |
| Whether the Collection Letter misleads under §1692e(2). | Letter deceptively implies charges; not clarified that fee may be third‑party. | Letter presents reasonable options; not materially false. | No §1692e violation; disclosures are not false or misleading to the least sophisticated consumer. |
Key Cases Cited
- Clomon v. Jackson, 988 F.2d 1314 (2d Cir. 1993) (establishes least sophisticated consumer standard)
- McStay v. I.C. Sys., Inc., 308 F.3d 188 (2d Cir. 2002) (materiality and consumer understanding in FDCPA claims)
- Shapiro v. Riddle & Assocs., 240 F. Supp. 2d 287 (S.D.N.Y. 2003) (ambiguity assessment in collection notices)
- Lane v. Fein, Such & Crane, LLP, 767 F. Supp. 2d 382 (E.D.N.Y. 2011) (materiality and readability under §1692e)
- Puglisi v. Debt Recovery Solutions, LLC, 822 F. Supp. 2d 218 (E.D.N.Y. 2011) (fee disclosures and FDCPA analysis)
- Bank v. Cooper, Paroff, Cooper & Cook, 356 Fed.Appx. 509 (2d Cir. 2009) (fee in demand notice; unconscionable collection practices)