A District Court judge in Pennsylvania has granted a defendant’s motion for summary judgment, while also denying a motion for summary judgment from the plaintiff, ruling that sending a collection letter for a business debt to the plaintiff using the plaintiff’s name and not the name of the business is not a violation of the Fair Debt Collection Practices Act.
The Background: The plaintiff had a business account with a a bank under the name “54 Solutions LLC.” The account was assigned to the defendant for collection. The defendant sent a letter to the plaintiff, which read, in part, “Our information shows you had a business account from …”
- The plaintiff responded by sending the defendant a cease-and-desist letter. The plaintiff attached two other letters received from the defendant that were attempts to collect on debts from two other accounts the plaintiff had with the same bank.
- Six weeks after the plaintiff sent his cease-and-desist, the defendant sent another letter to the plaintiff seeking to collect on the business account.
- The plaintiff filed suit in Philadelphia Municipal Court, accusing the defendant of violating Section 1692c(c) of the FDCPA. The defendant removed the case to federal court and both sides filed motions for summary judgment.
The Ruling: As noted by Judge Karen S. Marston of the District Court for the Eastern District of Pennsylvania, “it is well-settled that the FDCPA does not apply to business debts, only consumer debts.”
- The plaintiff attempted to argue that the obligations owed to the bank were consumer debts because he “did not use the account to obtain credit until he used it for personal, family or household purposes,” he offered no evidence to support this allegation. The plaintiff did supply a bank statement, but there was only one charge, for $9,000 and it was unclear whether the charge was for a business or consumer purchase.
- The plaintiff also attempted to argue that the debt was subject to the FDCPA because the defendant sent its correspondence toward the plaintiff using his full name rather than the name of the business. But that argument was “meritless” because how a collector treats an obligation is “irrelevant to an inquiry regarding the nature of that obligation itself,” Judge Marston wrote, citing a ruling from 2011.
