An Appeals Court in Washington state has upheld a lower court’s dismissal of a Fair Debt Collection Practices Act case that accused a creditor of violating the statute by attempting to collect in a name different than its own.
A copy of the ruling in the case of Morgan v. Bank of America can be accessed by clicking here.
The plaintiff obtained a credit card in 2006 with Bank of America., N.A., which was separate from Bank of America Corp. Bank of America Corp. acquired FIA Card Services. Bank of America, N.A., then merged with and under the charter of FIA. Customers of Bank of America, N.A., were notified that the terms of their agreements were changing and that the new administrator of their accounts would be FIA.
In 2014, FIA was merged under Bank of America (BANA), making it the administrator of the accounts. In 2012, the plaintiff stopped making payments on his credit card and was sued by FIA. While that collection action was pending, FIA was merged into BANA, but the collection action was not updated to reflect this development. The collection action was ultimately dismissed without prejudice in 2020. After that case was dismissed, the plaintiff sued the defendant in state court in Washington, alleging the defendant violated the FDCPA because it continued its collection suit as FIA after it had merged with BANA. The defendant attempted to remove the case to federal court, but it was remanded back to state court, at which point the defendant sought and won a motion to dismiss.
The plaintiff appealed, arguing that the defendant violated Section 1692a(6) of the FDCPA because it attempted to collect a debt using a name other than its own, making it appear as though a third person was attempting to collect. But, the Appeals Court ruled, even a least sophisticated consumer would not be confused and think that the debt had been transferred to a third-party agency. “Instead, a least sophisticated consumer (and even average-level consumer) might be led to believe that nothing had changed and FIA was still collecting its credit card debt in its own right,” the Appeals Court wrote. “There is no reason to think a least sophisticated consumer would be led to believe that BANA had acquired FIA’s debt and then contracted with FIA to collect the debt.”