Collection agency wins FDCPA lawsuit against unaccounted plaintiff


In a recent opinion issued by the United States District Court for the District of New Jersey in Benali v Afni, Inc. (United States District Court, D. New Jersey, Case No. 15-3605), Judge Brian R. Martinotti granted a motion for summary judgment in favor of defendant Afni, Inc., finding that the agency of collection did not violate the Fair Debt Collection Practices Act (FDCPA) because the plaintiff in the case did not have an account and therefore lacked standing because he suffered no damages.

A copy of the notice is available here.


Defendant Afni was hired by AT&T to collect alleged debts owed to the company and sent letters to consumers in an attempt to collect those debts. In letters sent to plaintiff David Benali and “more than 31,000 AT&T customers residing in New Jersey”, Afni revealed the following:

“Payments made electronically to Afni may be subject to a $4.95 processing fee. Payments sent by mail are not subject to any processing fees.

On May 29, 2015, Benali filed a class action lawsuit against Afni, alleging that the defendant had “no legal or contractual right to charge processing fees” for payments made electronically, while not charging any such fees for payments sent by mail.

In the lawsuit filed by Benali, there are inconsistencies regarding the account in question and who owns it, with references to Plaintiff’s “Wireless Customer Agreement with AT&T,” but Plaintiff’s attorney arguing that “Defendant provided the wireless card membership agreement underlying this AT&T debt. . . . My client has not signed this agreement. . . . My client has always maintained in this action that he never had an account with AT&T.

Benali filed a motion for summary judgment, while AFNI filed a counterclaim for summary judgment.


Judge Martinotti noted that the plaintiff “bears the initial burden of showing the merits of his claim” and that ultimately “the only issue to be resolved in this action is whether the actions of the defendant, in attempting to charge a $4.95 processing fee to consumers paying their debts by credit card, violates the FDCPA.

Plaintiff asserted that Afni’s action violated the FDCPA because the processing fee was not “expressly authorized by the contract creating the debt”, but “it is undisputed, however, that plaintiff is not never signed any agreement with AT&T, and Plaintiff concedes that “New Jersey State law neither expressly authorizes nor prohibits a processing fee for credit card payments.”

Afni argued the following based on Spokeo, Inc. vs. Robins:

“The plaintiff was neither injured nor suffered damage in fact and, therefore, does not have standing under Article II. (ECF #35 at 3.) Even assuming that the plaintiff has standing, defendant argues that its reference to a processing fee in the collection letter is not a violation of the FDCPA because plaintiff could have paid by mail without incurring a processing fee and, further, New Jersey law allows processing fees to be charged to consumers as long as consumers have another option to pay without incurring a fee.

In view of this, the AFNI sought summary judgment because “the plaintiff has failed to meet its obligation to show the absence of a genuine question of material fact and, moreover, does not have standing for to act under Article III for failing to demonstrate concrete and specific harm”.

In reviewing the facts of the case, Judge Martinotti agreed with AFNI’s interpretation Spokeo and the FDCPA, concluding that:

“In sum, Plaintiff admits that he never suffered any actual harm as a result of Defendant’s alleged violations of the FDCPA, and the alleged risk of harm to Plaintiff in this case is entirely conjectural or hypothetical. Because the plaintiff has suffered no factual prejudice, he does not have standing under Article III and this case must be dismissed accordingly for lack of jurisdiction in the matter. »

InsideARM perspective

This is a positive result for the ARM industry, which demonstrates that following Spokeoplaintiffs will have to demonstrate the actual harm caused as a result of a defendant’s action, rather than using the simplest of legal explanations to justify a lawsuit.

Afni’s Chief Compliance Officer, Alicia McKeighan, issued the following statement on the matter to insideARM:

“Afni has an unwavering commitment to compliance, and we are committed to defending cases that help provide clarity for the industry. The notice in this case clarified that mere procedural requirements cannot give rise to class action lawsuits. Benali, and similar cases, help us better understand the limits Spokeo can impose on consumer disputes.


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