Clerical Error in Creditor’s Name Does Not Sink Debt Collector

A demand letter sent by a debt collector was not doomed by an incorrect statement of the creditor’s name.  In Santibanez v. National Credit Systems, Inc., the debt collector’s initial letter stated as follows:

Re: ENCOMPASS MANAGEMENT CONSULTANTS

Account #: 3118797

Balance: $875.33

Dear CARLOS SANTIBANEZ,

It is imperative that you give this matter your prompt attention.

The above referenced account has been placed with this office for collection. National Credit Systems, Inc. has been authorized to recover this debt by way of credit bureau reporting (following this initial 30 day validation period) as well as other remedies available under the law. It is our intention to pursue this debt until resolved.

Santibanez v. Nat'l Credit Sys., 2017 U.S. Dist. LEXIS 4519, *1-2 (D. Or. Jan. 11, 2017).

The letter noted the creditor’s name as being “Encompass Management Consultants” when instead the actual creditor’s name was Encompass Management & Consulting LLC.  The debtor contended that the letter violated 15 U.S.C. 1692g by failing to accurately identify the creditor. According to the debtor, the demand letter which simply including the name “Encompass Management Consultants” in the subject line followed by an account number did not expressly state that Encompass was the creditor and moreover, the entity named in the letter did not even exist.

On cross motions for summary judgment, the court granted summary judgment in favor of the debtor collector and was persuaded by a number of facts.  First, the subject line included a single name (Encompass) and a single account number.  Secondly, the letter indicated that the account had been placed with the debt collector for collection. The court noted that the term “placed” did not indicate any change of ownership, a fact further emphasized by the letter’s indication that the debt collector was authorized to take certain actions to collect on the debt.  The court therefore concluded that the least sophisticated consumer would have understood Encompass to be the creditor. 

The court was also unswayed by the consumer’s argument that the misnaming of the creditor was confusing.  In satisfying itself that this was not the case, the court noted that a search of the secretary of state’s website only brought up one possible entity: Encompass Management & Consulting, LLC.  The court did, however, point out that the result might have been different had multiple names appeared in the Secretary of State search.