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Appeals Court Overturns Summary Judgment for Defendant in FDCPA Case over Creditor Name in Letter

The Court of Appeals for the Seventh Circuit has reversed a lower court’s summary judgment award in favor of a defendant and instead remanded the case back for summary judgment in favor of a plaintiff who sued a collection agency for allegedly violating the Fair Debt Collection Practices Act by not correctly identifying the current creditor to whom the debt was owed in a collection letter.

A copy of the ruling in the case of Steffek v. Client Services, Inc., can be accessed by clicking here.

The plaintiff received a collection letter that included “RE: CHASE BANK USA, N.A.” in the header of the letter. The plaintiff sued, alleging the letters violated Section 1692g(a)(2) because they did not clearly identify the current holder of the debt.

A District Court judge granted summary judgment in favor of the defendant, ruling that the undisputed facts of the case proved that Chase was the current creditor because it was the only creditor named in the letter.

But the Appeals Court thought otherwise.

Also included in the letter was the following statement: “If you request of this office in writing within thirty (30) days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.” That sentence, the Appeals Court ruled, raised the possibility that the debt had been sold to someone else and did not clearly indicate on whose behalf the defendant was collecting.

“The letter did not communicate clearly on whose behalf Client Services was trying to collect the debt,” the Appeals Court wrote. “The letter did say, however, that the recipient should pay Client Services rather than anyone else, which a recipient could reasonably understand as imply- ing that Client Services itself was then the creditor.”

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