District Court (N.M.) Says “Rounding Up” of Amount of Debt by Debt Collector Did Not Violate FDCPA

In Zuniga v. Trueaccord, No. 18-683 KG/KRS, 2020 U.S. Dist. LEXIS 95445 (D.N.M. June 1, 2020), the District Court granted summary judgment for the defendant debt collector in an FDCPA class action.

Plaintiff admits that she owes $1,585.00 on the Golden Valley Lending loan. (Doc. 26-3) at 4, depo. at 72. On March 2, 2018, Defendant sent an email to Plaintiff regarding the $1,585.00 balance on the Golden Valley Lending loan. (Doc. 26-5). In that email, Defendant offered “payment options” that Plaintiff could review by clicking on a “convenient online payment option” hyperlink. Id. On April 20, 2018, Plaintiff clicked on the “convenient online payment option” hyperlink which opened a page displaying three installment options to pay the $1,585.00 debt in full: three installments of $529.00; six installments of $265.00; and nine installments of $177.00. (Doc. 26) at 2, ¶ 6; (Doc. 26-6). This linked page (the first linked page) showed only the highest installment payment for each installment option. Id.; (Doc. 26-7). [*3]  Consequently, multiplying the installment payment by the number of installments totaled more than the $1,585.00 owed: an additional $2.00 under the three-month installment option ($1,587.00); an additional $5.00 under the six-month installment option ($1,590.00); and an additional $8.00 under the nine-month installment option ($1,593.00). See (Doc. 26-6). The first linked page did not have a section for entering payment information to begin an installment plan. Id. The first linked page also contained green hyperlinks, stating “Choose Offer,” located under each of the three installment options. Id. The green hyperlinks connected to pages Unless otherwise noted, the parties do not dispute the facts set forth in the summary of facts. 2 detailing future payment dates and payment amounts for each installment option. (Doc. 26-7). The three-month installment offer page displayed two equal payments of $529.00 and a final payment of $527.00, totaling $1,585.00; the six-month installment offer page displayed five equal payments of $265.00 and a final payment of $260.00, totaling $1,585.00; and the nine-month installment offer page displayed eight equal payments of $177.00 and a final payment of $169.00, totaling $1,585.00. Id. The first linked page did not indicate that the installment options would be later calculated as described above. (Doc. 26-6). Furthermore, a consumer could only enter payment information to start an installment plan after clicking on a “Choose Option” hyperlink. (Doc. 26-7). Plaintiff opened the March 2, 2018, email, because she was interested in paying off the loan. (Doc. 26-3) at 2, depo. at 66. Upon viewing the first linked page, Plaintiff multiplied $529.00 by three months and multiplied $265.00 by six months. Doing so, Plaintiff discovered that the totals for those two installment options exceeded the amount she owed by $2.00 to $8.00. (Doc. 34-3) at 59. Nonetheless, Plaintiff could not afford to pay $529.00 or $265.00 a month, let alone an additional $2.00. (Doc. 34-3) at 60-61; (Doc. 26-3) at 2-3, depo. at 66-67. Plaintiff did not multiply $177.00 by nine months because she also could not afford to pay $177.00 a month. (Doc. 26-3) at 3, depo. at 67. Although Plaintiff saw the “Choose Offer” hyperlinks, Plaintiff did not click on any of those hyperlinks. See (Doc. 34-3) at 74-75. Had Plaintiff clicked on the “Choose Offer” hyperlink for the three-month installment option, she would not have selected that installment plan because she could not afford to do so. (Doc. 41-1) at 2, depo. at 62. In fact, Plaintiff had just $50.00 a month that she could contribute to pay off her loan. Id. at 4, depo. at 69. Nonetheless, Plaintiff testified at her deposition that if multiplying $177.00 by nine months had 3 equaled $1,585.00, as represented in the first linked page, she would have selected the nine-month installment plan. (Doc. 34-3) at 120. To prepare the installment options on the first linked page, Defendant’s computer system divided the amount owed by three months, six months, and nine months, rounding each installment payment up to the nearest dollar.3 (Doc. 26-8) at 4, depo. at 15. Hence, the installment options on the first linked page do not total the amount owed. However, Defendant’s policy, “in terms of the programming,” prevents payments from exceeding the total balance owed. Id. Had Plaintiff clicked on any of the “Choose Offer” hyperlinks and selected an installment plan, she would have paid only the amount she owed, $1,585.00. Id. at 5, depo. at 17. II. The Class Action Complaint (Doc. 1) Plaintiff alleges that Defendant violated the Fair Debt Collection Practices Act (FDCPA) by initially presenting her with installment options that exceeded the balance on the Golden Valley Lending loan. Specifically, Plaintiff brings two FDCPA counts on behalf of herself and a putative class. (Doc. 1) at ¶ 27. In Count I, Plaintiff alleges a violation of 15 U.S.C. § 1692e, which prohibits a debt collector from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” Id. at ¶ 38. In Count II, Plaintiff alleges a violation of 15 U.S.C. § 1692f, which prohibits a debt collector from using “unfair or unconscionable means to collect a debt.” Id. at ¶ 43. Plaintiff concedes in the response to the Motion for Summary Judgment that she “is not seeking actual damages in this matter and … is 3 As a result of this lawsuit, Defendant no longer rounds installment payments up to the nearest dollar.

The District Court found no violation.

In this case, a least sophisticated consumer would assume from the face of the first linked page that the payments for the three-month installment option would be $529.00; the payments for the six-month installment option would be $265.00; and the payments for the nine-month installment option would be $177.00. The Court, however, would not expect a least sophisticated consumer to independently calculate those payments and discover, as Plaintiff did, that the payments exceed the balance due. Furthermore, a least sophisticated consumer “is bound to read collection notices in their entirety” and, therefore, would click on the “Choose Option” hyperlinks to fully explore the payment options. See Campuzano-Burgos, 550 F.3d at 299. Having done so, a least sophisticated consumer would find that the payment amounts on the first linked page represented the highest monthly payments and that the payments do not exceed the balance due. Read as a whole, the linked pages provide sufficiently clear information that a least sophisticated consumer would be certain of his or her rights. Consequently, the Court concludes, as a matter of law, that the language in the first linked page is neither false, deceptive, nor misleading and, thus, does not violate Section 1692e. For that reason, the Court will grant Defendant summary judgment as to Count I. In light of this determination, the Court need not address Defendant’s argument regarding the materiality of the allegedly false, deceptive, or misleading statements supporting the Section 1692e claim.