Ninth Circuit Holds Director Personally Liable for Illegal Debt Collection

FDCPA

On March 8, the U.S. Court of Appeals for the Ninth Circuit held that International Collection Corporation (ICC) and its director were liable for violating the Fair Debt Collection Practices Act (FDCPA) by falsely claiming in communications to debtors that ICC was entitled to interest and legal fees. Cruz v. International Collection Corp., No. 09-17449, 2012 WL 742337 (9th Cir. Mar. 8, 2012). In 2006, Cruz wrote two checks to Harrah’s Casino in Reno, Nevada. The checks bounced. Over the course of the next year, ICC sent Cruz eight collection letters, some of which falsely claimed that ICC was entitled to treble damages, interest, and legal fees. The director and sole owner of ICC signed and sent at least one such collection letter. The FDCPA bars the use of any false, deceptive, or misleading representation in connection with the collection of any debt. 15 U.S.C. § 1692e. Cruz filed suit and the district court granted summary judgment for the plaintiff. The Ninth Circuit affirmed the decision against ICC and affirmed that Hendrickson was personally liable. Because the director was personally involved in at least one illegal collection attempt, the court did not need to reach the question of whether an officer who qualifies as a debt collector may be held personally liable based solely on the action of serving in his role as an officer of the company.