ACA International has spotlighted a recent court ruling in which a collection agency was granted summary judgment after being accused of violating the Fair Debt Collection Practices Act by not properly identifying the creditor in a validation letter.
The collection letter referenced the creditor — Gramercy Park Digestive Disease Center — in the caption of the letter using an acronym — GPDDC — for which the creditor had obtained a license to do business under. The first line of the collection letter then said, “The above-named creditor has referred your account to us.”
A copy of the ruling in the case of Deleon v. Action Collection Agency of Boston, can be accessed by clicking here.
By connecting the letter and the caption, the defendant had done enough to identify the creditor in the letter, this satisfying Section 1692g(a)(2) of the FDCPA. Wrote Judge Ronnie Abrams in her ruling:
Reading the letter here as a whole, the least sophisticated consumer would understand the creditor is GPDDC, LLC. The letter not only refers to the creditor, but does so in a manner that identifies the relationship between the debt collector, ACA Boston, and the creditor.
Judge Abrams wasn’t buying that the use of an acronym was too confusing nor that using the phrasing “above-named creditor” would trip up a least sophisticated consumer into thinking anyone other than GPDDC was the creditor.
ACA International, in its summary of the case, provided some tips to collection agencies regarding the composition of validation notices.
A careful review of this decision can supply those who participate in debt collection with possible compliance strategies. When considering where to place the creditor’s name in a validation letter, debt collectors, in many jurisdictions, must consider whether or not the “least sophisticated consumer” will understand it to be from the current creditor when they read the letter. If a collection agency chooses to put the current creditor’s name in the caption of the letter, it must be sure that the body of the letter creates an implicit relationship between the name in the caption and the letter. In other words, the letter must refer to the creditor’s name in the caption in a way that the consumer will understand that it is referring to the current creditor.
Click here to see more tips from ACA related to this case and how to approach organizing validation notices.
