Thursday, August 21, 2008

consumer - FDCPA - letter from "legal department" with no attorneys

Rosenau et al. v. Unifund Corp. - Third Circuit - August 21, 2008

1. Sec. 1692e(3) - Where there are no attorneys in a debt collector's "Legal Department," a collection letter signed by the "Legal Department" violates FCCPA sec. 1692e(3), which prohibits the "false representation or implication that...any communcation is from an attorney," even where the letter was not on law firm letterhead or signed by an attorney.

A "least sophisticated debtor" could have reasonably inferred that the Legal Department has "attorneys who played a role in writing or sending the letter." The fact that the letter says that it comes from a "debt collector" doesn't change this result. The terms "attorney" and "debt collector" are not mutually exclusive. Nor does it matter that the letter talks about a possible referral "to an attorney in your area"; lawyers commonly refer cases to other lawyers who practice in the geographical area where a debtor is located.

2. Sec. 1692e(10) - The court rejected plaintiff's argument that the use of Legal Department violated the catchall provision of the FDCAP, sec. 1692e(10), which prohibits the use of "any false representations or deceptive means to collect...any debt." It rejected an FTC advisory letter on the issue, holding that it was not entitled to deference except to the extent that its logic was persuasive. The court found that there is no clear objective standard that could be applied on this issue, since different legal departments have difference functions and emphases. However, the court remanded the case for further factual development, since the lower court's ruling was the result of a judgment on the pleadings, which is "inappropriate" for the resolution of a factual issue.