The United States Court of Appeals for the Seventh Circuit recently held that the assignee of a debt, as well as the debt collector it enlisted, was liable for violating the Fair Debt Collection Practices Act (“FDCPA”) when the debt collector’s correspondence to the debtors did not clearly name the current creditor.  See Janetos v. Fulton Friedman & Gullace, LLP, 2016 WL 1382174 (7th Cir. Apr. 7, 2016).  In the case, the debt collector sent correspondence to a number of debtors in which the header stated, “Re: Asset Acceptance, LLC Assignee of [Original Creditor]”.  The text of the letter stated, “Please be advised that your above referenced account has been transferred from Asset Acceptance, LLC to [debt collector].”  The debtors then sued, arguing that the letter did not make it clear whether Asset or the debt collector was the current creditor, which is required under the FDCPA.  See 15 USC 1692g(a)(2).  The district court granted the defendants’ motion for summary judgment, finding that the debtors did not submit any extrinsic evidence of consumer confusion based on this omission.  On appeal, the Seventh Circuit reversed.  First, although it held that some categories of alleged violations of the FDCPA require extrinsic proof of confusion, omissions of section 1692g’s required disclosures is not one of them.  Second, it held that Asset could be held vicariously liable for the debt collector’s correspondence because, as a debt collector itself, Asset “is independently obliged to comply with the Act to monitor the actions of those it enlists to collect debts on its behalf” and “should not be able to avoid liability for unlawful debt collection practices simply by contracting with another company to do what the law does not allow it to do itself.”

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