Debt collector did not violate FDCPA by seeking court costs in dunning letter or by filing affidavits where the affiant’s testimony was based on personal knowledge even though he was basing his testimony on prior debt collector’s records

There two issue of significance in Clark v. Main Street Acquisition Corp. 13-3763 (6th Cir. Jan. 27, 2014). The first is whether the debt collector violated the FDCPA by filing false affidavits seeking court costs in addition to the amount owed. Debtor argued that the inclusion of the word costs in the affidavit violated the FDCPA by falsely representing the amount owed, when the case had not been litigated and costs had not yet been incurred. The Court noted that Kentucky law permits costs to be awarded to the prevailing party so it is reasonable for a consumer to assume that a case headed to court may involve costs in an amount that has yet to be determined. Therefore, a request for costs is not a false representation and does not violate the FDCPA. Debtor also argued that the debt collector violated the FDCPA because it relied on the testimony of an affiant who falsely averred he had personal knowledge of the prior collector’s records. The debtor argued that the affiant’s representations that his testimony was based upon the debt collector’s business records, that those records were kept in the regular course of its business, and that they were made contemporaneously with the event described, were false because the affiant did not have personal knowledge of the data and did not make the records himself. The court was not persuaded by this argument either. The statements were not inaccurate, it held, because the affiant accessed and reviewed the files before making his averments. He thus had personal knowledge of the prior collector’s records. The court also noted that even if the averments were misleading, they were not material. The least sophisticated consumer understands that lenders and debt collectors, by necessity, have to rely on business records that they may not have personally created, especially in an age of automated, computerized transactions. Thus, an affiant’s statement of personal knowledge regarding a record created by a third party does not violate the FDCPA.

Download Related Document