The Eastern District of New York recently granted a debt collector’s motion for summary judgment in a Fair Debt Collection Practices Act case because the collection letter clearly identified the creditor to whom the debt was owed and would not mislead even the least sophisticated consumer. In doing so, the Court critiqued the “lawyer’s case” and warned of the costs imposed by frivolous cases, “especially to the least sophisticated consumer[.]” A copy of the opinion can be found here.
Plaintiff Maribel Ocampo applied for and received a credit card, then used it to make thousands of dollars’ worth of purchases. After she defaulted, the account was turned over for collection. The debt collector sent Ocampo a collection letter that stated at the top “Re: Synchrony Bank Walmart MC.” Further, right below this line, the letter stated the account number and balance due. Based on the letter, Ocampo alleged two violations of the FDCPA because the letter (1) purportedly failed to identify the name of the creditor to whom the debt is owed, and (2) was allegedly misleading because it was open to more than one possible interpretation.
The Court strongly disagreed with Ocampo’s theory of liability and held the letter contained “sufficient information for even the least sophisticated consumer to understand that the debt collection letter is attempting to collect a debt for Synchrony Bank, the issuing bank for her Walmart credit card.” The Court also pointed out that it is not necessary for a consumer to understand the relationship between the issuing bank and the retailer, because “she does not have to be an expert on credit card processing to match the Synchrony Bank Walmart credit card referenced in the debt collection letter to the Synchrony Bank Walmart credit card in her wallet that she used to incur thousands of dollars in unpaid debt.”
In addressing her second argument, the Court held that Ocampo failed to identify any alternative interpretation of the collection letter “other than the accurate interpretation that Synchrony Bank is the creditor for her charges at Walmart, and no other reasonable interpretation is apparent.” The Court added, “If she doesn’t know that it is [debt on] her Walmart credit card that is being collected, her sophistication level is below that of the least sophisticated consumer.”
After explaining its holding, the Court next criticized cases that “are far afield from the original intent behind the FDCPA, i.e. preventing ‘collection abuses’” and explained this “‘lawyer’s case’ . . . alleges a defect of which only a sophisticated lawyer, not the least sophisticated consumer, would conceive.” The Court cautioned against “the consequences of these creative exercises” as the cost of litigation “must increase the cost of credit, especially to the least sophisticated consumer, as at least some of those costs will be passed on.” The Court ended the opinion by warning that “if courts interpret the FDCPA to have as low a bar as plaintiff’s counsel argues here, they would end up hurting the least sophisticated consumer by making her pay higher interest rates, collection costs, or depriving her of access to credit at all, rather than helping her.”