The law firm of Troutman Sanders has linked to a case where a collection agency was granted summary judgment after being accused of misleading the plaintiff in a class-action suit alleging a violation of the Fair Debt Collection Practices Act.
The issue in the case was an alleged discrepancy over the official business name of the creditor, Comenity Capital Bank and the name of the client, PayPal Credit, both of which were referenced in a collection letter send by the agency, Simm Associates.
The plaintiff alleged that the agency provided misleading information because it identified the client as someone different than the original creditor.
A copy of the ruling, from Judge Beth Bloom of the District Court for the Southern District of Florida, can be accessed here.
The plaintiff sued, alleging violations of Section 1692(g) and Section 1692(e). Under Section 1692(g), the defendant was accused of failing to disclose the name of the creditor to whom the debt is owed because it named the client and the original creditor, but did not name a “current creditor.” Simm countered that it disclosed the name of the actual creditor as well as the name of the company the plaintiff would recognize.
In this case, the least sophisticated consumer is receiving a letter relating to his or her PayPal Credit account. The undisputed facts reveal that a consumer who chooses to open a PayPal Credit account is unlikely to know that Comenity is the bank ultimately providing the credit and thus the creditor. This is because PayPal Credit’s advertising makes no reference to Comenity; the application process makes no reference to Comenity except in the small print; the process by which the consumer can charge an online purchase to his or her PayPal Credit account makes no reference to Comenity; and the process by which the consumer pays off the PayPal Credit account likewise makes no reference to Comenity. Rather, Comenity’s identity as the bank extending credit is only disclosed to the consumer in the fine print within the PayPal Credit Terms and Conditions and the FAQs. Thus, the least sophisticated consumer may never know or understand that PayPal Credit is not the actual creditor and that Comenity – an entity the consumer may have never heard of – is the actual creditor.
The Section 1692(e) claim was for making false, deceptive, or misleading representation when it did not identify Comenity as the current creditor.
Even accepting that there exists a hyper-technical FDCPA violation here, the Court’s review of the demand letter leads it to conclude that it is not material as there is nothing misleading about its content. There is nothing that would influence the consumer’s decision to pay the debt or otherwise cause an unsophisticated consumer to be concerned about paying the incorrect creditor.
