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11th Cir. Rejects FDCPA Claim That Debt Collector Misidentified the Creditor

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a consumer’s complaint alleging that a collection letter violated the federal Fair Debt Collection Practices Act, 15 U.S.C. 1692, et seq., by failing to meaningfully convey the name of his creditor, as required.

In so ruling, the Eleventh Circuit concluded that dismissal was appropriate because the consumer did not claim that the collector misidentified his creditor, and the ‘least sophisticated consumer’ who had been a patient at a hospital would surely understand the hospital to be the creditor when its name was listed next to the amount of the debt on the letter.

A copy of the opinion in Lait v. Medical Data Systems, Inc. is available at:  Link to Opinion.

A consumer accrued debt from personal medical services rendered in 2015. The next year he received a letter from a purported debt collection agency, which indicated that it was seeking collections on the “account(s) indicated below,” and listed the medical service provider’s name next to a service date, a patient name, and an outstanding balance of $412.  The collection letter did not expressly refer to the provider as the creditor.

Notably, although the collection letter incorrectly named the provider in a different word order (“Medical Center Enterprise,” rather than “Enterprise Medical Center”), the consumer did not allege that this caused any confusion, or that the two were different entities.

The consumer sued the collector, alleging that the collection letter failed to “meaningfully convey the name of the creditor to whom the debt is owed,” in supposed violation of subsection 1692g(a)(2) of the FDCPA.  The collector moved to dismiss, arguing that the letter contained the name of the creditor, even though it did not apply the descriptive term “creditor.”

Applying the “least sophisticated consumer” standard, the trial court granted the motion to dismiss, finding it implausible that the consumer would fail to grasp that the provider was his creditor after reading the collection letter as a whole.  The instant appeal ensued.

The Eleventh Circuit first noted that the parties and trial court assumed that the “least sophisticated consumer” standard applies here, despite the fact that the Eleventh Circuit had not adopted this standard to evaluate the validity of a debt collector’s notice under 1692g.  However, the Eleventh Circuit declined to resolve that issue here.

On appeal, the consumer argued that the trial court erred for two reasons: (i) that it was plausible that the collector misidentified his creditor, and; (ii) that the least sophisticated consumer would not understand his creditor’s identity.

In addressing the consumer’s first argument, the Eleventh Circuit noted that the complaint itself failed to allege a misidentification as to the creditor, as required. Instead of alleging facts establishing that the collector failed to effectively convey the name of the creditor, the complaint merely disputed the effectiveness of the collection letter.

Accordingly, even evaluating the plausibility of a claim based on the allegations therein in a light most favorable to the plaintiff consumer, the district court did not err in granting dismissal, because the complaint made no such claim that the collector misidentified his creditor.   Iqbal, 556 U.S. at 678, 129 S. Ct. 1937.

The Eleventh Circuit also rejected the consumer’s argument that the least sophisticated consumer would not understand the debt collector’s statement of his creditor’s identity.   Noting that the consumer acknowledged that the collector sent the collection letter to collect upon a purported debt incurred for medical services from the provider, the Eleventh Circuit opined that the least sophisticated consumer could be expected to connect the dots to understand that the provider was the creditor, because the collection letter listed the provider’s name next to an outstanding balance.

Moreover, the only other entity referenced in the collection letter was that of the collector, which explicitly identified itself as the collection agency.   Thus, the consumer had no valid argument that the least sophisticated consumer would think the creditor was anyone other than the provider, as “the debt collector is obviously the agent of the creditor,” as opposed to the creditor itself.   Caceres v. McCalla Raymer, LLC,755 F.3d 1299, 1304 (11th Cir. 2014).

Accordingly, because the consumer failed to state a claim under section 1692g of the FDCPA, the Eleventh Circuit affirmed the trial court’s order dismissing the consumer’s complaint.

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Christopher P. Hahn practices in Maurice Wutscher’s Commercial Litigation, Consumer Credit Litigation and Insurance Recovery and Advisory groups. Prior to joining Maurice Wutscher LLP, he served under the General Counsel at the Florida Office of Financial Regulation. He also obtained extensive experience litigating property insurance claims through all phases of discovery, motion practice and other pre-trial activities. Christopher obtained his Bachelor of Science degree in Business Administration from the University of Southern California, followed by his Juris Doctorate degree from the University of Miami School of Law. He is also a graduate of the University of Miami’s Masters of Business Administration program, completing his degree with an emphasis on finance and mergers and acquisitions.

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