Friday, July 27, 2007

consumer - debt collection - corporate officer

Campuzano-Burgos v. Midland Credit Mgmt., et al. - ED Pa. - July 26, 2007

http://www.paed.uscourts.gov/documents/opinions/07D0870P.pdf

Use of a dunning letter bearing the signature of corporate president and executive v.p. who had no role in the debt collection process was held to be violation if Fair Debt Collection Practices Act, 15 USC 1692e(9), which bars use of any written communication which, inter alia, creates a false impression as to its source, authorization or approval.

The FDCPA is to be interpreted from the viewpoint of the least sophisticated debtor, while avoiding bizarre or idiosyncratic intepretations, and presuming reading with care and in context. The FDCPA is meant to protect the gullible as well as the shrewd.

A writing is deceptive where is can be reasonably read to have two or more different meanings, one of which is inaccurate. It was alleged in this case that the letter was misleading because it gave the impression that the debt was being pursued by "high-ranking officer of the company," when in fact it was not, thereby creating a false impression as to source, authorization or approval. There are analgous cases involving the use of an attorney's name when the attorney is not involved in the collection.

In both situations, there is an implication of "special authority." An unsophisticated consumer getting a letter from an attorney or corporate officer "knows the price of poker has just gone up" because attorneys and officers have a special status and greater weight and "get the debtor's knees knocking. An escalation from a lowly collection agent to a senior executive of the company" shows that the debt collector means business. It "connotes authority and is more likely to generate a response." In such cases, there is a "general concern with debt collectors' practice of falsely implying that someone in a position of real authority is supervising the collection of this debt." It is an "attempt to goad a debtor into paying by using a signatory who has no involvement in the handling of the…cases as a signal that the collection process has escalated to a graver level….to convey that a high-roller has entered the game."

The court held that "where some aspect of a debt collector's communication - whether explicit or implied - has the purpose or effect of making a debtor more likely to respond, the FDCPA requires that it be true." Because the executives in this cases did not review the case and had no actual involvement, the court found that the letter was deceptive and misleading within the meaning of sec. 1692e.

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