A federal judge green-lighted a class action lawsuit that accused Forster & Garbus, LLP and NCOP XI, LLC of acting deceptively by citing a creditor's name as "NCOP XI, LLC A/P/O Capital One."
The Fair Debt Collection Practices Act (FDCPA) was enacted in 1977 to provide a private remedy to consumers who have been deceived, harassed, or abused during the course of any debt collection activity. This firm, The Langel Firm, strives to stay cutting edge with the developing laws that apply this broad statute to the world of state-court debt defense collection litigation.
The case discussed in this blog entry, Eun Joo Lee v. Forster & Garbus LLP and NCOP XI, LLC[1] exemplifies the type of allegation you may see against a typical debt buyer and its collection law firm.
Lee was brought as a putative class action[2] against debt buyer, NCOP, XI, LLC and collection firm, Forster & Garbus, LLP alleging that using the name ""NCOP XI, LLC A/P/O Capital One" is deceptive because it can reasonably be read to have two or more different meanings, one of which is inaccurate.
Judge Irizarry agreed, holding:
"Debtor stated plausible claim that successor creditor's collection letter was misleading to the least sophisticated customer and failed to identify the creditor to which she owed the debt, and thus did not comply with the FDCPA... Fair Debt Collection Practices Act, §§ 807, 809, 15 U.S.C.A. §§ 1692e, 1692g."
Using the "unusual abbreviation A/P/O and the name of the original creditor, easily could have failed to alert the least sophisticated consumer that her debt was owned by third-party NCOP," held the court.
Debt collectors who use crafty contortions for names of successive debt buyers may face crafty class action lawyers who will capitalize on that decision. I have personally seen active collection lawyers use various names of debt buyer names that do not even exist[3], let alone appear confusing. This Lee decision fortifies what I believe to be the Second Circuit's[4] view that the misidentification of a creditor is a material transgression well suited for class action treatment.
The court held, "the entity to which a debtor owes money potentially affects the debtor in the most basic ways, such as what the debtor should write after "pay to the order of" on the payment check to ensure that the debt is satisfied."
I am also pleased to see that the court rejected the defendants' "materiality" argument relating to this creditor misidentification issue. The court reminds the bar that the materiality doctrine applies to § 1692e[5] and § 1692f[6] -- not § 1692(g)(2) where creditors are required to provide the name of the creditor within five days of an initial communication. No part of that section cites materiality as a requirement.
If you've received a demand letter or legal document that mysteriously cites the creditor's name in a manner that is confusing or unfamiliar, please contact me right away. Here is a fairly comprehensive list of active debt buyers and collection lawyers who operate in New York, especially New York City and Long Island.
[1] 926 F Supp 2d 482 [EDNY 2013].
[2] A lawsuit filed by one or more plaintiffs on behalf of themselves and others who allegedly suffered a common wrong (the putative class). If the court agrees with the plaintiff(s), it will certify the class, turning the lawsuit into a class action.
[3] The Langel Firm has recently a commenced with co-counsel a class action against CACH, LLC and Kevin Shine, PLLC alleging that the entity CACH of Colorado, LLC, cited as a plaintiff in at least 2,229 cases, does not exist and to allege it does amounts to repeated false representations and a deceptive means to collect debts.
[4] The federal appeals circuit that covers the territories of Connecticut, New York, and Vermont.
[5] False or misleading representations.
[6] Unfair Practices.