On June 26, the U.S. Court of Appeals for the Sixth Circuit concluded that a misrepresentation of the creditor’s name in a foreclosure action may constitute a false representation actionable under Section 1692e of the FDCPA. Wallace v. Washington Mut. Bank, F.A., No. 10-3694, 2012 WL 2379664 (6th Cir. June 26, 2012). In Wallace, a law firm allegedly brought a foreclosure action before the firm’s bank client received an assignment of the mortgage and transfer of the promissory note. The borrower contended that the law firm violated the FDCPA in foreclosing on behalf of the bank before the transfer and assignment occurred. The district court dismissed the case, holding that the failure to record an assignment before filing a foreclosure action is not a deceptive practice under the FDCPA. The Sixth Circuit disagreed and reversed, holding that the borrower’s allegations were sufficient to support a claim of material misrepresentation that would confuse or mislead an unsophisticated consumer.
