The Court of Appeals for the Second Circuit has overturned a lower court’s ruling in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act because a letter that was sent to the plaintiff did not properly identify the creditor to whom the debt is owed.
A copy of the ruling in the case of Bryan v. Credit Control can be accessed by clicking here.
The case involves a private label credit card offered by Kohl’s. While Kohl’s was the servicer of the account, the account was actually owed by Chase Bank until 2011 and Capital One Bank thereafter. In a collection letter that was sent to the plaintiff, the defendant identified Kohl’s as “our client” and “Chase Bank Usa N.A.” as the original credit grantor. The letter did not mention Capital One anywhere.
The plaintiff filed suit, alleging the letter violated Section 1692g(a)(2) of the FDCPA by not properly identifying the name of the creditor to whom the debt was owed and Section 1692e by making a false, deceptive, or misleading representation when attempting to collect on a debt.
A District Court judge accepted recommendations from a Magistrate Judge to grant the defendant’s motion for judgment on the pleadings, ruling that the failure to identify the name of the actual creditor “would not have materially affected a consumer’s decision-making process.”
But the Second Circuit made short work of the District Court’s ruling. The agreements between Kohl’s and Capital One and Capital One and the cardholder make it clear that Capital One is the creditor, and because Capital One was not named in the letter, it did not comply with Section 1692g, the Appeals Court ruled.
While admitting that had the defendant identified Capital One instead of Kohl’s as the creditor, that might have caused more confusion and not less, the 1692e claim was dismissed on the grounds that Kohl’s was the creditor to whom the debt was owed. Because that finding was “incorrect,” and because the lower court did not address the materiality under Section 1692e, the Appeals Court remanded the case back to the District Court for further proceedings.