Weast v. Rockport Financial, LLC
MEMORANDUM AND ORDER... IT IS HEREBY ORDERED that the motion of Defendant Rockport Financial, LLC, to dismiss the amended complaint is GRANTED with respect to Plaintiff's claims under 15 U.S.C. §§ 1692(e)(2) and 1692f, and DENIED with respect to Plaintiffs claim under § 1692f(1).. Signed by District Judge Audrey G. Fleissig on 7/17/2015. (NEB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
ROCKPORT FINANCIAL, LLC d/b/a/
REGIONAL CREDIT SERVICES, INC.
Case No. 4:15CV00336 AGF
MEMORANDUM AND ORDER
This action, brought under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692
(“FDCPA”), is before the Court on the motion of Defendant Rockport Financial, LLC, to
dismiss Plaintiff Jessica Weast’s first amended complaint, for failure to state a claim. For
the reasons set forth below, Defendant’s motion shall be denied in large part.
This case arises out of Defendant’s attempt to collect on a debt of $896, allegedly
owed by Plaintiff to another. Plaintiff claims that a collection letter Defendant sent to her
violated the FDCPA in several ways. The letter, attached to Plaintiff’s amended
complaint, informed Plaintiff of her outstanding balance, and notified her that she would
be charged an additional $3.00 “convenience fee” if she made a payment using a credit or
debit card. The letter also stated, in bold and capital letters, “ALL CHECKS MUST BE
MADE PAYABLE TO REGIONAL CREDIT SERVICES.” Another portion of the
letter stated, “If you are still unable to take care of this obligation, please call the
office . . . so we are not forced to pursue other means to collect the debt.” (Doc. No. 10-1
The one-count amended complaint claims that the convenience fee charge violates
15 U.S.C. § 1692f(1) (prohibiting the “collection of any amount (including any interest,
fee, charge, or expense incidental to the principal obligation) unless such amount is
expressly authorized by the agreement creating the debt or permitted by law”). She also
claims that the letter violates §1692e(2) (prohibiting debt collectors from making any
false or misleading representations regarding “(A) the character, amount, or legal status
of any debt; or (B) any services rendered or compensation which may be lawfully
received by any debt collector for the collection of a debt”) “by using false impressions to
characterize the amount of the debt.” Lastly she claims that the letter’s alleged threat of
litigation or that Defendant would use other means to damage her credit reputation in an
effort to collect the debt, constitutes an unfair and unconscionable means to collect the
debt in question, in violation of § 1692f (prohibiting the use of any “unfair or
unconscionable means to collect or attempt to collect a debt”).
Besides the collection letter, Plaintiff also attached to her complaint a copy of the
Consumer Financial Protection Bureau (“CFPB”) Supervisory Highlights Report from
October 2014, that states that § 1692f(1) of the FDCPA prohibits the imposition of fees
incidental to the principal obligation where the contract creating the debt does not
authorize the imposition of such fees and state law “is silent” on the issue.
Defendant argues that the complaint fails to state a claim, as a matter of law.
According to Defendant “the mere reference to a convenience fee” in the letter does not
violate the FDCPA because (1) the fee is independent of the existing debt, as it relates to
an additional service by a third-party, and (2) the letter made it clear that Plaintiff had
another method of payment available, namely payment by check, that did not involve a
convenience fee. Defendant contends that Missouri law does not prohibit the charging of
convenience or processing fees, and that this silence should be considered as permission
to charge such fees. Defendant argues that the CFPB report is not binding on the Court
and should not be adopted. Finally, Defendant argues that Plaintiff’s assertion that the
letter used illegal threatening language is not supported as a matter of law.
In response, Plaintiff argues that offering a choice of payment methods is
immaterial to the illegality of charging a convenience fee for payments by a credit or
debit card, which is forbidden by the clear language of the statute and the CFPB Report,
where, as here, state law is silent and the contract creating the debt does not authorize
such a fee.
To survive a motion to dismiss, a complaint must contain sufficient factual matter,
which, when accepted as true, states “a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)). “Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements,” will not pass muster. Id. The reviewing court must accept
the plaintiff’s factual allegations as true and construe them in the plaintiff’s favor, but is
not required to accept the legal conclusions the plaintiff draws from the facts alleged. Id.;
Retro Television Network, Inc. v. Luken Comm’cns, LLC, 696 F.3d 766, 768-69 (8th Cir.
The FDCPA is designed to protect consumers from abusive debt collection
practices and protect ethical debt collectors from a competitive disadvantage. 15 U.S.C.
§ 1692(e). In order to establish a violation of the FDCPA, a plaintiff must demonstrate
that: (1) plaintiff has been the object of collection activity arising from a consumer debt;
(2) the defendant attempting to collect the debt qualifies as a debt collector under the Act;
and (3) the defendant has engaged in a prohibited act or has failed to perform a
requirement imposed by the FDCPA. O’Connor v. Credit Protection Ass’n LP, No.
4:11CV2187 SNLJ, 2013 WL 5340927, at *6 (E.D. Mo. Sept. 23, 2013).
The FDCPA is a broad remedial statute and its terms are to be applied “in a liberal
manner.” Picht v. John R. Hawks, Ltd., 77 F. Supp. 2d 1041, 1043 (D. Minn. 1999),
aff’d 236 F.3d 446 (8th Cir. 2001). “A violation of the FDCPA is reviewed utilizing the
unsophisticated-consumer standard which is designed to protect consumers of below
average sophistication or intelligence without having the standard tied to the very last
rung on the sophistication ladder.” Strand v. Diversified Collection Serv., Inc., 380 F.3d
316, 317 (8th Cir. 2004) (citation omitted). This standard “protects the uninformed or
naïve consumer yet also contains an objective element of reasonableness to protect debt
collectors from liability for peculiar interpretations of collection letters.” Id. at 317-18
(citing Peters v. Gen. Serv. Bureau, Inc., 277 F.3d 1051, 1054-1055 (8th Cir. 2002)).
Claim under § 1692f(1)
As noted above, Title 15 U.S.C. § 1692f prohibits debt collectors from using
“unfair or unconscionable means to collect or attempt to collect any debt.” The provision
provides a non-exhaustive list of conduct that violates the FDCPA, including “[t]he
collection of any amount (including any interest, fee, charge, or expense incidental to the
principal obligation) unless such amount is expressly authorized by the agreement
creating the debt or permitted by law.” 15 U.S.C. § 1692f(1).
Here, Defendant does not suggest that the agreement creating the debt authorized
the collection of a convenience fee when the debt was paid by credit or debit card. The
parties have not cited, and the Court has not found, any Missouri law discussing whether
the collection of convenience fees of the nature at issue in this case is permissible.
Indeed, according to the Missouri Division of Finance, Missouri does not regulate
collection agencies. See Mo. Div. of Fin., Debt Collection, (July 9, 2015, 2:37 PM),
The Eighth Circuit has not addressed the issue of whether silence of the law
constitutes permission in this context, but two other circuits have interpreted § 1692f(1)
of the FDCPA to mean that, when state law does not affirmatively authorize or prohibit
service charges, a service charge may only be imposed if the customer expressly agreed
to it in the contract which gives rise to the debt. See Pollice v. Nat’l Tax Funding, L.P.,
225 F.3d 379, 407-08 (3d Cir. 2000); Tuttle v. Equifax Check, 190 F.3d 9, 13 (2d Cir.
1999). Such a reading comports not only with the CFPB Report relied on by Plaintiff,
but also with the Staff Commentary on the FDCPA, which states that “a debt collector
may not collect an additional amount if . . . the contract does not provide for collection of
the amount and state law is silent.” Staff Commentary on the FDCPA, 53 Fed. Reg.
50,097, 50,108 (Fed. Trade Comm’n 1988).1 Under the liberal interpretation to be
accorded the FDCPA, the Court concludes that this is the proper reading of the statute.
The Court also rejects Defendant’s argument that the $3.00 convenience fee is not
prohibited by the FDCPA, as a matter of law, because it relates to an additional service
by a third-party. Defendant’s reliance on Lee v. Main Accounts, Inc., No 96-3922, 125
F.3d 855 (table), 1997 WL 618803 (6th Cir. Oct. 6, 1997), is misplaced. In that case the
court determined on summary judgment that a five percent charge on payments made by
credit card did not violate the FDCPA, because the defendant “would not have received
any additional compensation from the credit card fee.” Such evidence may be
forthcoming at the summary judgment stage, but based on the record before it, the Court
cannot say that Defendant would not receive any profit from charging $3.00 for each
credit/debit card transaction.
The Court is not persuaded that the convenience fee is separate from the “principal
obligation” and thus does not fall under § 1692f(1). Such a conclusion is contrary to a
liberal construction of § 1692f(1) which prohibits the collection of “any amount” which
is not provided for in the contract or authorized by state law, “including any interest, fee,
charge, or expense incidental to the principal obligation.” 15 U.S.C. § 1692f(1). See
Campbell v. MBI Assoc., Inc., No. 12-CV-989 (SLT)(CLP), 2015 WL 1543215, at *12
The Court notes that, in the context of the FDCPA, staff commentary from the FTC is
not entitled to judicial deference, and is entitled to respect only to the extent that it has the
power to persuade. Goswami v. Am. Collections Enter., 377 F.3d 488, 493 n.1 (5th Cir.
(E.D.N.Y. Mar. 31, 2015); Quinteros v. MBI Assocs., Inc., 999 F. Supp. 2d 434, 438
The Court must also reject Defendant’s argument that the convenience fee charge
in the collection letter here did not violate the FDCPA because it was clear from the letter
that this fee would only be charged if Plaintiff chose to pay with a credit or debit card,
and that another payment option was available. There is some authority supporting
Defendant’s position. See, e.g., Lee, 1997 WL 618803, at *1 (“[Defendant] did not force
[Plaintiff] to pay any surcharge . . . . [T]his type of optional payment choice is, by
definition, not an unconscionable or deceptive debt collection practice”). However, other
courts have found that offering a payment option that does not violate the statute does not
save offering a payment option that would violate the statute, as the later is still an
attempt to collect a fee which is prohibited by the FDCPA. See Shami v. Nat’l Enter.
Sys., No. 09-CV-722 (RRM)(VVP), 2010 WL 3824151, at *3-4 (E.D.N.Y. Sept. 23,
2010) (holding that the defendant’s charging of transaction fees for payments by phone or
internet were still fees “incidental to Plaintiff’s purported actual debt” prohibited by §
1692f(1), even though they were conditioned on the chosen method of payment;
collecting cases). This approach appears to the Court to be correct. Thus, the Court will
deny Defendant’s motion to dismiss as to Plaintiff’s claim under § 1962f(1).
Claim under § 1692e(2)
The FDCPA prohibits debt collectors from using “any false, deceptive, or
misleading representation or means in connection with the collection of any debt.” 15
U.S.C. § 1692e. As noted above, § 1692e(2) prohibits “the false representation of (A) the
character, amount, or legal status of any debt; or (B) any services rendered or
compensation which may be lawfully received by any debt collector for the collection of
a debt.” Id. § 1692e(2).
Here, the Court finds that the language of the collection letter did not “use false
impressions to characterize the amount” of Plaintiff’s debt as claimed by Plaintiff. The
statement about the collection fee was separate from the statement of Plaintiff’s total
balance due, which was stated twice in the letter. A reasonable unsophisticated consumer
would understand that the convenience fee was not a part of her principal debt. Thus,
Plaintiff fails to state a claim under § 1693e(2). See Peters, 277 F.3d at 1056 (finding
that a statement in a collection letter would not mislead a reasonable unsophisticated
consumer, and thus did not violate the FDCPA “as a matter of law”); Brill v. Fin.
Recovery Servs., Inc., No. 4:10-CV-3121, 2010 WL 5825480, at *6 (D. Neb. Nov. 10,
2010) (collecting cases and dismissing a claim under § 1693e(2)(A) for failure to state a
claim after concluding that the collection letter did not misrepresent the amount of any
Claim under § 1692f
The Court agrees with Defendant that Plaintiff has failed to state a claim under
The Court recognizes that, if it is determined that Defendant violated § 1692f(1), it
may follow that Defendant also violated § 1692e(2)(B) by mischaracterizing
compensation which it could lawfully receive under the FDCPA. See Shami, 2010 WL
3824151, at *4 (concluding that if a plaintiff states a claim under § 1692f(1), the plaintiff
also states a claim under § 1692e(2)(B)). However, as Plaintiff’s only allegations
regarding § 1692e(2) are that Defendant used “false impressions to characterize the
amount of debt,” and contain no reference to § 1692e(2)(B), the Court need not decide
this question here.
§ 1692f (prohibiting “unfair or unconscionable means to collect or attempt to collect any
debt”) based on what she alleges she perceived to be an illegal threat of litigation or a
threat that Defendant would use other means to damage her credit reputation in an effort
to collect the debt. While § 1692f allows a court to sanction improper conduct that the
FDCPA fails to address specifically, see, e.g., Sparks v. Phillips & Cohen Assocs., Ltd.,
641 F. Supp. 2d 1234, 1250 (S.D. Ala. 2008), here the Court concludes as a matter of law
that the challenged language did not constitute an unfair or unconscionable means of
collecting a debt. See, e.g., Peters, 277 F.3d at 1056 (holding that a collection letter
which “convey[ed] the consequences” of inaction did not violate the FDCPA). The Court
will therefore dismiss Plaintiff’s claim under § 1692f.
IT IS HEREBY ORDERED that the motion of Defendant Rockport Financial,
LLC, to dismiss the amended complaint is GRANTED with respect to Plaintiff’s claims
under 15 U.S.C. §§ 1692(e)(2) and 1692f, and DENIED with respect to Plaintiff’s claim
under § 1692f(1).
AUDREY G. FLEISSIG
UNITED STATES DISTRCIT JUDGE
Dated this 17th day of July, 2015.
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