New York Federal Court Holds That Debt Collection Letter Did Not Violate FDCPA

The United States District Court for the Western District of New York recently held that a debt collector’s letter that named one party as the original and current creditor and another as the party that retained the debt collector did not violate the Fair Debt Collection Practices Act (“FDCPA”).  See Daly v. Capital Mgmt. Servs., LP, 2015 WL 4662759, at *1 (W.D.N.Y. Aug. 6, 2015).  In the case, the debt collector sent a letter to the debtor that named Department Stores National Bank (“DSNB”) as the original and current creditor in the letter’s header, and as the entity to whom payments should be made in the body of the letter.  The first sentence of the letter, however, stated, “This company has been engaged by Bloomingdale’s to resolve your delinquent debt.”  The plaintiff debtor filed a complaint under the FDCPA alleging that the “least sophisticated consumer” would be confused because it would be unclear to whom the debt is owed, DSNB or Bloomingdales, and that the FDCPA requires the letter to clearly state this information.  (15 USC 1692g(a)(2))   The debt collector filed a motion to dismiss, arguing that the letter’s header clearly named DSNB as the current creditor, and that the FDCPA’s “least sophisticated consumer” standard did not apply to plaintiff’s far-reaching interpretation of the letter.  The court agreed and granted the motion to dismiss.  It noted that the header and the direction to make payments directly to DSNB informed even the least sophisticated consumer of the identity of the current creditor, stating, “the statute’s protection against deceptive debt collection practices ‘does not extend to every bizarre or idiosyncratic interpretation’ of a collection notice, and courts are cautioned to apply the ‘least sophisticated consumer’ standard ‘in a manner that protects debt collectors against liability for unreasonable misinterpretations of collection notices.’”

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