District Court Decision is Mixed Bag Where Creditor Name is Misstated

When confronted with the issue of whether the name of the creditor was a material representation for purposes of 15 U.S.C. 1692e and 1692g, a district court in New Jersey issued a good news/bad news decision.  In Cohen v. Dynamic Recovery Solutions, a debt buyer sent an initial demand letter which misidentified the creditor.  See Cohen v. Dynamic Recovery Solutions, 2016 U.S. Dist. LEXIS 97016 (D.N.J. Jul. 26, 2015).  The consumer filed suit under the FDCPA alleging, among other things, that the misidentification of the creditor violated both 15 USC 1692e and g. 

The Good News.

Section 1692e of the FDCPA prohibits the use of false, deceptive or misleading information.  In the Third Circuit, false statements must be material in order to be actionable under 15 U.S.C. 1692e. The collection agency acknowledged that the letter misidentified the creditor, but argued that the misidentification was not material because since the creditor was not the original creditor, the consumer would not have recognized either the incorrect name that was actually listed or the correct name.  The court noted that because the complaint contained no allegations of any familiarity with either the creditor listed or the correct creditor or any allegations suggesting that the name of the owner of the debt impacted him in any way, the court the name of the debt owner was not material.  The court therefore granted the motion to dismiss as to the plaintiff’s claim under section 1692e as to the defendant’s inclusion of the incorrect name of the debt owner.

The Bad News.

Materiality, however, is not an element of section 1692g(a) which requires that debt collectors provide consumers with certain information, including the name of the owner of the debt, within five days of the initial communication with the debtor.  Because the letter did not strictly comply with section 1692g, the court denied the motion to dismiss as to section 1692g.