The Court of Appeals for the Seventh Circuit has upheld a lower court’s ruling in a “meritless” case against a collection agency that was sued for allegedly violating the Fair Debt Collection Practices Act by mentioning the original and current creditor in a collection letter.
A copy of the ruling in the case of Dennis v. Niagara Credit Solutions Inc., can be accessed by clicking here.
The plaintiff received a collection letter from the defendant. The letter listed Washington Mutual Bank as the “original creditor” and LVNV Funding as the “current creditor.” The letter identified the defendant and said that the plaintiff’s account had been placed with the collection agency and that the agency had been authorized by its “client” to offer a payment plan or settlement on the unpaid debt.
The plaintiff filed a class-action lawsuit, alleging the letter violated Section 1692g(a)(2) of the FDCPA by not clearly and effectively identifying the name of the creditor to whom the debt was owed. A District Court judge granted the defendant’s motion for judgment on the pleadings, which was appealed by the plaintiff to the Seventh Circuit.
By listing two different creditors and referring to the “client” in the letter, the defendant “could very likely confuse a significant portion of consumers who received the letter as to whom the debt was then owed,” and that the letter does not explain the difference between the current and original creditors, the plaintiff claimed. The plaintiff used another Seventh Circuit ruling — Smith v. Simm Associates — as the basis for his argument. But, in Smith, the situation was that the original and current creditor was the same. In this case, the debt was purchased by the current creditor and including the original creditor’s name was “helpful,” the Seventh Circuit said in its ruling.
In deeming the case “meritless,” the Appeals Court wrote:
The district court noted that the letter could have made the relationships among the parties “crystal clear” by spelling out that LVNV had purchased the debt from Washington Mutual and that LVNV was Niagara’s client. While such language may have helped clarify the party’s relationships, § 1692(g)(a)(2) does not require such a detailed explanation of the transactions leading to the debt collector’s notice. Rather, it requires clear identification of the current creditor, and this letter complied.
