New Jersey Federal Court Dismisses FDCPA Claim Based on Visibility of Debt Collector’s Name

The United States District Court for the District of New Jersey recently found that a debt collector was permitted to use its name on the envelope of a debt collection letter, despite the possibility that an internet search would disclose that the debt collector was in the debt collection business, but may have violated Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) by attempting to collect a debt without a license from the New Jersey Department of Banking and Insurance. See Valentine v. Unifund CCR, Inc., 2021 WL 912854 (D.N.J. Mar. 10, 2021). In the case, Plaintiff allegedly defaulted on a financial obligation and Defendant Distressed Asset Portfolio III, LLC (“DAP”) purchased Plaintiff’s account. DAP then placed the account with Defendant Unifund CCR, Inc. (“Unifund”), who mailed Plaintiff a debt collection letter stating that Unifund was servicing Plaintiff’s account on DAP’s behalf. When Plaintiff received the letter, the name “Unifund CCR” and Unifund’s address was visible through the glassine window envelope. Plaintiff then filed a putative class action alleging that because Unifund’s name was visible through the envelope and DAP was not licensed by the New Jersey Department of Banking and Insurance pursuant to the New Jersey Consumer Finance Licensing Act (“NJCFLA”), the letter violated the FDCPA. Specifically, Plaintiff alleged that the letter violated § 1692(e), which prohibits debt collectors from using any “false, deceptive, or misleading representation or means in connection with the collection of any debt[,]” § 1692(f), which prohibits debt collectors from using “unfair or unconscionable means to collect or attempt to collect any debt[,]” and §1692(g), which requires debt collectors to include written notice of certain rights in the initial communication. Defendants moved to dismiss the complaint.

The Court granted the motion in part and denied it in part. First, the Court held that the letter did not violate §1692(f), noting that § 1692(f)(8) “explicitly permits a debt collector to use its business name ‘if such name does not indicate that he is in the debt collection business.’” The Court found that the name Unifund does not indicate or suggest that Unifund is in the debt collection business and thus, Unifund was permitted to use its name on the envelope. In so finding, the Court rejected Plaintiff’s argument that a person could determine that Unifund is a debt collector through an internet search. Moreover, the Court noted that “if the Court adopted Plaintiff’s interpretation, it would eviscerate the statutory exception that permits debt collectors to include their name on the envelope of a debt collection letter. Given the ubiquity of the Internet, under Plaintiff’s interpretation of Section 1692f(8), any name would indicate that the entity is in the debt collection business after an Internet search[,] and “[t]he court will not construe the statutory language in a manner that fundamentally alters Section 1692f(8).” Second, the Court denied Defendant’s motion with regard to Plaintiff’s § 1692(e) claim. The Court found that DAP was not exempt from the NJFCLA’s licensing requirement despite the fact that it was a subsequent purchaser of the debt from an exempt entity. Thus, Unifund’s attempt to collect a debt on behalf of DAP was a possible violation of § 1692(e). Lastly, the Court dismissed Plaintiff’s § 1692(g) claim, finding that Plaintiff failed to include sufficient allegations demonstrating that Defendant violated the provision.

For a copy of the decision, please contact Michael O’Donnell at, Michael Crowley at, Desiree McDonald at, or Andrew Raimondi at