In a recent action, Quinteros v. MBI Assoc., Inc., 12-CV-2517 (E.D.N.Y. 2014), District Court for the Eastern District of New York denied MBI Associates, Inc.'s motion to dismiss an action brought against them for illegal debt collection practices. Plaintiff filed a class action lawsuit against this corporation for its alleged violation of the Fair Debt Collection Practices Act ("FDCPA") by sending debt collection notices "that imposed a five-dollar processing fee for any payments made via credit card or check over the phone." MBI Associates is accused of violating the law because of its abusive practices and its misleading misrepresentations.
The purpose of the FDCPA is to eliminate abusive debt collection practices by debt collectors, and the courts are committed to fulfilling those goals by liberally construing the statute in favor of the least sophisticated consumer. The court rejected defendant's argument that its practices were not abusive, unfair nor unconscionable. Instead, the court said that the collection of any amount, unless it is expressly authorized by the agreement creating the debt or permitted by law, is otherwise prohibited by law. Even if that amount is $5.00, the Court declared that such an amount must be disclosed in an agreement before it can be collected. The court also criticized MBI for its misleading practices in its attempts to collect fees. The Court agreed with Plaintiff who argued that MBI violated the law by misleading its consumers to pay a Processing Fee that falsely implies that MBI is entitled to collect the processing fee in the first place.