Rhode Island Federal Court Holds That Bank Was Liable When It Sent Letter Under Another Name

The United States District Court for the District of Rhode Island recently held that a bank’s use of a third party’s name in a letter to a consumer was a violation of the Fair Debt Collection Practices Act (“FDCPA”).  See Pimental v. Wells Fargo Bank, N.A., 2016 WL 70016 (D.R.I. Jan. 6, 2016).  In the case, the plaintiff received a letter from “America’s Servicing Company” regarding a debt it owed to Wells Fargo.  The plaintiff then filed a complaint arguing that the bank had violated the FDCPA.  The bank filed a motion to dismiss, arguing that, as the original creditor, it was not liable for any alleged violations because it did not meet the definition of a debt collector.  The plaintiff argued that, by using the “America’s Servicing Company” name on its letter, the bank fell into an exception to the “debt collector” definition, which includes “any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts.”  15 U.S.C. § 1692a(6).  The Court agreed, denied the bank’s motion to dismiss and granted the plaintiff’s motion for judgment on the pleadings based on the fact that the use of the third party name was deceptive.  The Court further rejected the bank’s argument that the plaintiff was not deceived into thinking a third party was collecting the debts, finding instead that the plaintiff does not need to plead that he or she was deceived, only that the “hypothetical least sophisticated consumer” would be.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.