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Financial Services Law Insights and Observations


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  • Court says debt collector’s name doesn't violate FDCPA


    On June 18, the U.S. District Court for the Eastern District of Washington granted summary judgment in favor of a debt collector, concluding the debt collector did not violate the FDCPA by using the name “State Collection Service.” The class action alleged the debt collector’s name “gave the false impression that the debt collection company was in some way associated with the State of Washington in violation of the FDCPA.” The debt collector moved for summary judgment. Upon review of the debt collector’s written and oral communications with the plaintiff, the court noted that using the term, “State” in its name, or omitting the term “Inc.” from its name are not deceptive or misleading as a matter of law. Moreover, the court stated, “even if [the debt collectors]’s use of the term ‘State’ or omission of ‘Inc.’ could be construed as faintly misleading, it was not a material misrepresentation that affected Plaintiff’s ability to ‘intelligently choose’ her response to the collection notice.” Additionally, because all of the debt collector’s communications identified the original creditor and the amount of the debt, the court found that “the least sophisticated debtor would not be misled by [the debt collector]’s use of the name ‘State Collection Service.’”

    Courts Debt Collection FDCPA Unsophisticated Debtor

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  • District Court holds that a debt buyer qualifies as a debt collector under the FDCPA


    On May 25, the U.S. District Court for the Eastern District of Pennsylvania held that a debt buyer of time-barred debt qualified as a “debt collector” under the Federal Debt Collection Practices Act (FDCPA). The consumer (plaintiff) sued a debt collector and a debt buyer after receiving collection letters from the collector requesting she contact it to discuss settlement. The plaintiff alleged both companies violated the FDCPA by implying the debts were legally enforceable when, in fact, the statute of limitations had run. In rejecting the defendants’ motion to dismiss, the court found that the debt buyer’s “principal purpose of business is debt collection, either directly or through another collector” and therefore it is a debt collector under the FDCPA. The court also rejected the defendants’ arguments that the consumer did not adequately plead a violation of the FDCPA, holding that the collection letter—even though it did not threaten litigation or include a payoff amount—could mislead “the least sophisticated debtor” into believing she had a legal obligation to pay a time-barred debt because it called on plaintiff to contact it to discuss “settlement options” and specifically noted that the collector was not obligated to accept any payment proposal. The court also found that the letter may leave the least sophisticated debtor “uncertain as to her dispute rights under the [FDCPA]” and should have contained a “reconciling statement.”

    Courts FDCPA Debt Buyer Debt Collection Unsophisticated Debtor

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