A federal judge in New Jersey has certified a class of student loan borrowers in an action claiming a debt-collection letter contained false and misleading statements about possible late charges.

U.S. District Judge Robert Kugler on Monday granted class certification to the named plaintiff, Jennifer Hovermale, and denied a motion to dismiss filed by the defendant, Immediate Credit Recovery.

Hovermale, a former student at Rider University in Lawrenceville, alleges that ICR violated her rights under the federal Fair Debt Collection Practices Act when it sent her a letter about her student loan, which was in default, warning her that in addition to interest and other charges, she could face “late charges.”

According to Kugler’s decision, Hovermale filed her lawsuit against ICR after learning that the terms of her student loan did not include a provision for late fees in the event of nonpayment.

ICR had moved for summary judgment, saying Hovermale lacked standing under Article III of the U.S. Constitution because she suffered no actual injury.

U.S. District Judge Robert Kugler/photo by Carmen Natale/ALM

Kugler rejected that argument, saying it was clear that Hovermale, and potentially the other plaintiffs, had shown sufficient evidence when they received a factually misleading claim.

“ICR’s opposition falls flat,” Kugler said. “Hovermale claims that ICR violated her substantive FDCPA rights by sending her a letter including the materially misleading late charges language—when ICR had no lawful right to assess late charges—constituting an injury in fact.

“The court agrees with Hovermale as to the framing of the harm at issue,” he said.

Hovermale said in arguing for class certification that she has identified at least 2,893 other New Jersey class members who have received similar letters from ICR mentioning the imposition of possible late fees.

Although Hovermale was a Rider student, the ruling does not say whether the other potential plaintiffs also attended that university.

ICR claimed it sent out only 207 such letters, according to the ruling.

Nevertheless, Kugler said, Hovermale met the standard set in 2001 by the U.S. Court of Appeals for the Third Circuit in Stewart v. Abraham, which said there should be at least 40 would-be plaintiffs in order to attain class-action status.

Kugler wrote, “Here, the proposed class includes those who received the same or substantially similar form letters from ICR containing the same late charges language.”

The lead attorney for Hovermale and the putative class is Daniel Frischberg, who heads a firm in Marlton.

ICR retained Monica Littman of the Philadelphia office of Fineman Krekstein & Harris.

Neither returned a call seeking comment.