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Chicago Partners Ryan Holz and Doug Sargent Quoted in Cook County Record Article on Federal Case Affirming Debt Collectors’ Ability to Include $0 Line Items in Statements

January 25, 2019

Ryan Holz and Doug Sargent, Partners in Locke Lord’s Chicago office, commented on a recent federal case in which U.S. District Judge Gary Feinerman granted summary judgment to debt collector Allied Interstate LLC in its dispute with plaintiff Clarence Wood. The case concerned whether debt collectors including a $0.00 line item for interest and fees in a collection notice represented a deceptive or misleading business practice when no interest or fees could accrue in the future. In his decision, Judge Feinerman determined that although such a statement could be misleading in certain circumstances, Plaintiff Wood had failed to meet his burden to establish that deception.

Sargent pointed out that, in the circumstances presented, it was the plaintiff’s burden to “submit extrinsic evidence that the statement was misleading to unsophisticated consumers." He also noted a contrary decision would have made debt collectors vulnerable to more lawsuits, saying in part, “Debt collectors frequently use $0.00 in statements so this would have been fertile ground for increased litigation."

Holz added, “Debt collectors can breathe a sigh of relief,” though he recommended avoiding the use of such $0.00 line items to avoid the risk of litigation. He also said if “[debtors] want to pursue a claim of this type, it will be an uphill battle.”

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