A summary of recent top cases. Editor’s note: This article is available for members only.
8/14/2020 10:30
Each week, ACA International’s Compliance Analysts Laura Dadd, Betsy Clarke and Andrew Pavlik compile relevant case summaries for ACA members. Here is a recap of the cases this week. Members may also submit cases for consideration to our compliance team at [email protected].
Court Finds Creditor Did Not Qualify as a Debt Collector Under the FDCPA’s False Name Exemption
The consumer incurred a medical debt with the creditor and received two statements regarding their account. The statements listed the consumer’s account number on the first and second pages of the statement and listed the consumer’s “[g]uarantor [a]ccount [n]umber” as the same number. The statement provided three methods of payment: online, by mail, or by phone. The consumer paid the amount requested.
After the consumer made a payment, the creditor charged the consumer for pathology work related to his treatment. The creditor sent three statements to the consumer and then sent him a letter. The consumer and the creditor disputed whether the creditor or a third party debt collector, Tele-Computer Systems, sent the letter. The creditor claimed that the name Tele-Computer Systems is the name of the program used by the creditor’s health services receivables department. The letter includes the name Tele-Computer Systems twice and the name of the creditor seven times. It also included the same guarantor number as the previous statements and the same website to make a payment.
Consumer’s Mother Had Standing to Bring Claim for TCPA Violation
The Telephone Consumer Protection Act’s prohibition against a creditor calling a cellphone without the express prior consent of the called party provides standing for persons beyond the subscriber of the cellphone number who receive the offending calls. The TCPA permits standing for the person who is the primary user of the cellphone number called by the creditor.
A consumer who employed her son at her company made payments on his car loan by taking money out of her son’s paycheck. When the loan fell into arrears due to confusion over the timing of payments, the creditor called the son and the consumer/mother called the creditor on her cellphone attempting to resolve the matter. While the consumer was the primary user of the cellphone, her daughter was the subscriber on the cellphone plan for the cell number used by the consumer.
After the consumer called the creditor about the car loan payments, the creditor began calling the consumer on her cellphone. The consumer spoke with the creditor’s representatives and repeatedly directed them to cease calling her, but the creditor persisted, calling the consumer on her cellphone hundreds of times.
The creditor did not dispute that they made the calls or that the calls were made without consent. Its sole objection to the consumer’s suit was that the consumer lacked standing to bring a claim because she was not the subscriber to the cellphone number that received the offending calls.
The court rejected the creditor’s argument. First, the court distinguished the case relied on by the creditor, Osorio v. State Farm Bank, F.S.B., on the grounds that (1) Osorio “did not address statutory standing or the TCPA’s private cause of action,” (2) the facts were different (the consumer in Osorio was not the primary user of the cellphone number in question), and (3) “even if the only parties with standing to sue were those who can also give the requisite consent, [the consumer here] might have been expressly or impliedly authorized by her daughter to provide the necessary consent, an issue [the creditor] VSC does not address.”
Consumer Cannot Sue Creditor for FCRA Violation Because Consumer Failed to Allege Proper Chain of Notice
In this case, the consumers took out a mortgage loan from a bank and the creditor subsequently sought to foreclose on their home when the consumers failed to make payments. Although the parties stipulated to agree to a deficiency judgment, several years later the consumers learned their credit report listed the mortgage as still open and that they were behind in payments. The consumers notified the creditor, who agreed to correct the report but did not do so for several months.
The consumers filed a complaint alleging the creditor failed “to perform a reasonable re-investigation and correction of inaccurate information” and failed “to correct errors in the information that it provided to credit reporting agencies.”
The consumers’ complaint did not specify which provision of the Fair Credit Reporting Act was violated by the conduct of the creditor.
The creditor moved to dismiss the consumers’ complaint asserting its “duty of investigation is only triggered after a furnisher of information receives notice of a dispute from a consumer reporting agency” and that the consumers failed to make this allegation.
Court Finds Letter Failed to Disclose the Identity of the Current Creditor
A consumer filed suit against a debt collector for alleged violations of § 1692g(a)(2) of the Fair Debt Collection Practices Act. He claimed received a collection letter that failed to provide the identity of the current creditor.
The top right-hand corner of the letter in question contained the following information (italics added throughout):
Account Number: [Redacted] 6615
Service Period: 02/01/2014 – 12/25/2016
Amount Due: $620.76
Address: [Redacted]
Reference Number: [Redacted] 7469.
The top left-hand corner of the letter contained the debt collector’s logo and the following message appeared below the logo:
Dear [Consumer]:
Your recently disconnected Time Warner Cable account has been forwarded to us to assist you in the resolution of your balance due. Enclosed is a summary of your remaining charges. Please contact us today at the number provided below to pay your balance by phone.
Thank you.
The bottom of the letter stated:
“This is an attempt to collect a debt. Any information obtained will be used for that purpose. NOTICE – SEE REVERSE SIDE FOR IMPORTANT NOTICES AND CONSUMER RIGHTS.”
The back of the letter also indicated, in relevant part:
“The name of the creditor to whom the debt is owed is in the letter on the reverse side of this notice.”
At the outset, the court observed § 1692g(a) of the FDCPA requires a debt collector to provide “‘the name of the creditor to whom the debt is owed.’”. . . “[and debt collectors] must state the required information ‘clearly enough that the recipient is likely to understand it.’”