A debt collector who sends a collection letter with an incorrect creditor and account number to a consumer's parents has violated the FDCPA, says the 9th Circuit in Tourgeman v. Collins Financial Services, Inc. d/b/a USA, LP.
"We are persuaded that, in the context of debt collection, the identity of a consumer's original creditor is a critical piece of information, and therefore its false identification in a [ ] letter would be likely to mislead some consumers in a material way."
"The debtor who takes Paragon Way's letters at face value—either because he does not remember the details concerning his financing of a computer bought several years beforehand, or perhaps because he never knew the identity of his original creditor to begin with—might engage in a fruitless attempt to investigate the facts of this non-existent debt, in a responsible effort to determine how to most effectively respond to the collection notice. This debtor might, quite reasonably, contact American Investment Bank to obtain background information so that he can remember what had earlier transpired, or to obtain any records that the bank holds pertaining to his debt so that he can prove he already had paid it off, if he believes such is the case. But, of course, American Investment Bank would have no record of a loan agreement; and the unknown account number certainly is of no help in getting to the bottom of things. Even if the consumer eventually finds his way to learning that the letter referred to the Dell debt he had incurred with CIT Online Bank, the delay already would have cost him some portion of the thirty days that the FDCPA grants to consumers before having to respond to a collection notice, lest the debt collector be entitled to assume the validity of the debt. See 15 U.S.C. § 1692g. And such “confusion and delay in trying to contact the proper party concerning payment on [the] loan” is precisely the kind of infringement of the consumer's best interests that the FDCPA seeks to combat."
In this case, the collection letters were sent to the Plaintiff's parents. When the collector received no response (from his parents, since, again, it never actually sent anything to the Plaintiff's correct address and instead sent collection letters to his parents), it sued on the debt. This may seem like a pretty ham-handed and egregious violation of the FDCPA, but, unsurprisingly, the Association of Credit and Collection Professionals sees it differently, in an article titled "Error in Collection Letter, Even if Consumer Never Received It, Violates FDCPA."
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