Degroot v. Client Services, Inc., No. 20-1089 (7th Cir. 2020)Annotate this Case
Degroot defaulted on a debt owed to Capital. AllianceOne sent Degroot a letter, stating: The amount of your debt is $425.86 ... interest and fees are no longer being added. Degroot understood that Capital had “charged-off” his account, meaning that his debt would no longer accrue interest or other fees for any reason. Capital subsequently transferred the account to CSI. CSI's 2019 letter stated: BALANCE DUE: $425.86 and “NEW INFORMATION ON YOUR ACCOUNT,” indicating that Capital had placed the account with CSI for collections, with an itemized summary of Degroot’s balance. After offering to resolve the debt, with disclosures required by certain states, concluded by stating “no interest will be added to your account balance through the course of” CSI collection efforts
Degroot filed a purported class action, alleging that CSI’s letter misleadingly implied that Capital would begin to add interest and fees to previously charged-off debts if consumers failed to resolve their debts with CSI and that he was “confused.” Degroot asserted that CSI violated the Fair Debt Collection Practices Act. 15 U.S.C. 1692. The Seventh Circuit affirmed the dismissal of the suit. The 2019 letter accurately disclosed the amount of the debt and did not imply fees or interest would be added in the future. Even if CSI’s letter did imply that fees and interest could begin to accrue if the debt remained outstanding, the statement was not misleading given that Wisconsin law provided for the assessment of fees and interest on “static” debts in certain circumstances.