Seventh Circuit holds identification of original and current creditor in debt collection letter did not violate FDCPA

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The U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s judgment on the pleadings in favor of the defendants (a debt buyer and a collection agency) in a putative class action that alleged the defendants had violated the Fair Debt Collection Practices Act by sending the named plaintiff a collection letter identifying both the original creditor and the debt buyer.

In Dennis v. Niagara Credit Solutions, Inc., the collection letter sent by the collection agency identified the bank that originated the debt as the “original creditor” and the debt buyer that purchased the debt from the bank after the plaintiff’s default as the “current creditor.”  The plaintiff claimed that listing two separate entities as “creditor” violated the FDCPA requirement to send the consumer a written notice containing “the name of the creditor to whom the debt is owed.”  According to the plaintiff, listing two entities as the “creditor” when “one of them [was] a debt buyer, which would likely be unknown to the consumer—and not explaining the difference between those two creditors, then stating that the [collection agency] was authorized to make settlement offers on behalf of an unknown client—could very likely confuse a significant portion of consumers who received the letter as to whom the debt was then owed.”

The Seventh Circuit affirmed the district court’s entry of judgment on the pleadings in favor of the defendants.  It agreed with the district court that the letter could have made the relationships among the parties clearer by spelling out that the debt buyer had purchased the debt from the bank and that the debt buyer was the collection agency’s client.  Nevertheless, the Seventh Circuit held that the FDCPA “does not require such a detailed explanation of the transactions leading to the debt collector’s notice” and that “[r]ather, it requires clear identification of the current creditor, and this letter complied.”

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