Judge Grants Summary Judgment in Favor of Defendant in FDCPA Letter Case

A District Court judge has granted summary judgment in favor of a defendant that was accused of violating the Fair Debt Collection Practices Act by not clearly identifying the current creditor in a collection letter.

A copy of the ruling in Smith v. Simm Associates can be accessed by clicking here.

The issue in this case relates to a common occurrence with respect to store- or private-labeled credit cards, where the name on the card says one company, but the actual name of the company that is actually issuing the credit and maintaining the account is different. In this case, the card was labeled as a PayPal Credit card, when it fact it was Comenity Capital Bank that was the creditor. Nonetheless, the collection letter sent to the plaintiff referenced both names, identifying PayPal as the client of the collection agency and Comenity Capital Bank as the original creditor.

The plaintiff alleged the letter violated Section 1692(g)(a)(2) and Section 1692e of the FDCPA because it referenced an original creditor and not the current creditor. However, the plaintiff noted that had the letter not mentioned PayPal, she would not have recognized the debt that was being collected.

In using another case in which it successfully defended a similar lawsuit alleging an FDCPA violation with the same language in a collection letter, the defendant was able to illustrate that it was not only attempting to follow the letter of the law, but its spirit, the defense said.

“The FDCPA is intended to protect consumers from abusive, unfair, and deceptive debt collection practices,” wrote Judge William Griesbach in his ruling. “There was nothing abusive, unfair, or deceptive about Simm’s notice to Smith about her outstanding debt. The letter contained the name of the creditor to whom the debt was owed, and offered payment arrangements authorized by PayPal Credit, the name Smith was most likely to recognize as the source of the debt.”



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