What’s in a name? For debt collectors, the answer potentially is years of litigation according to the Third Circuit’s recent opinion in Levins v. Healthcare Revenue Recovery Group LLC.
In Levins, Healthcare Revenue Recovery Group LLC (HRRG), a debt collector, attempted to collect a debt from the plaintiff debtors. HRRG, which had registered to do business in New Jersey under the name “ARS Account Resolution Services,” identified itself as “ARS” in several voicemail messages that it left for plaintiffs. Plaintiffs brought a putative class action alleging that HRRG violated the “true name” provision of the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using “the name of any business, company or organization other than the true name of the debt collector’s business, company, or organization.” 15 U.S.C. § 1692e(14). The district court granted HRRG’s motion to dismiss the claim.
On appeal, the Third Circuit reversed the dismissal. The Court, adopting the Federal Trade Commission’s interpretation of the “true name” provision, held that the provision “permit[s] a debt collector to ‘use its full business name, the name under which it usually transacts business, or a commonly-used acronym[,]’ as long as ‘it consistently uses the same name when dealing with a particular consumer.’” The plaintiffs in the Levins case alleged that the acronym “ARS” is associated with hundreds of businesses, including an unrelated debt collector, and, therefore, was not an acronym commonly associated with HRRG. Given those allegations, the Court explained that “[n]othing in the information properly before us [on review of an appeal from an order granting a motion to dismiss] indicates that ‘ARS’ is HRRG’s full business name, the name under which it usually transacts business, or its commonly used acronym.” Therefore, the Court held that plaintiffs stated a plausible claim for violation of the FDCPA’s “true name” provision and remanded the case for further proceedings. The Court noted that HRRG’s challenge to plaintiffs’ allegation that “ARS” was not an acronym that HRRG commonly used would have to wait until summary judgment or trial.
The Third Circuit did, however, affirm the trial court’s rejection of two additional legal theories that plaintiffs asserted. First, the Court rejected plaintiffs’ argument that HRRG violated a provision of the FDCPA that prohibits debt collectors from failing to make a “meaningful disclosure of the caller’s identity” when they call debtors. 15 U.S.C. § 1692d(6). The Court held that “‘meaningful disclosure of the caller’s identity’ is not restricted to providing the name of the debt collector.” Rather, a debt collector that discloses during a call that it is a debt collector has made a “meaningful disclosure” of its identity under the FDCPA. Second, the Court held that, because HRRG’s messages adequately warned that it would use any information collected from the debtors to collect a debt, HRRG did not, as plaintiffs alleged, violate a section of the FDCPA that prohibits “the use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” 15 U.S.C. § 1692d(10).
In light of the Third Circuit’s holding in Levins, debt collectors should consider using a name registered with a government agency or bureau when they communicate with debtors. Doing so will enable debt collectors to provide the courts with a public record, which the courts may consider on a motion to dismiss, to establish that they used their full business name or “transacting as” name to contact the debtor. Using any name other than an “official” name evidenced by a government record carries risk because it opens the door for debtors to allege that the name the debt collector used was a not a “true name,” which allegation the courts will be required to accept as true on a motion to dismiss.