Appeals Court Rules in FDCPA Case Involving Letter That Was Never Received

ACA International, the Association of Credit and Collection Professionals, recapped a recent decision by the Ninth Circuit Court of Appeals that determined a consumer had standing to assert claims based on collection letters he did not receive.

Officials explained the court arrived at its decision because the alleged violation of the plaintiff’s statutory right not to be the target of misleading debt communications constitutes an injury.

The Ninth Circuit panel in San Francisco also held that the consumer had a statutory cause of action under the Fair Debt Collection Practices Act (FDCPA), according to ACA International. The organization reviewed the case involving David Tourgeman versus Collins Financial Services, a purchaser, collector and reseller of charged-off consumer debt.

In Tourgeman case, ACA International explained the consumer filed a class action for violations under the FDCPA alleging that debt collectors made false representations to him in connection with their efforts to collect the balance on a computer the consumer purchased.

The consumer claimed that the debt collectors violated the FDCPA by misrepresenting the identity of his original creditor in a series of collection letters that never actually went to the consumer but were mailed to his parents’ house, as well as in a complaint filed against him in state court.

The complaint was subsequently dismissed because the consumer had already paid the debt, according to officials.

ACA International went on to mention the Ninth Circuit reversed the district court’s grant of summary judgment in favor of the debt collectors. The panel determined that the letters and the complaint contained materially misleading statements that trigger FDCPA liability and, therefore, ruled that the consumer was entitled to judgment on his FDCPA claims.

“The appellate court reasoned that although the consumer did not suffer any emotional harm or economic loss as a result of the letter, no injury is actually required to bring an FDCPA claim,” officials said.

The court of appeals also said, “By ensuring that consumers are fully and truthfully apprised of the facts and of their rights, the FDCPA enables them ‘to understand, make informed decisions about, and participate fully and meaningfully in the debt collection process.’

“The false representations would likely mislead consumers in a manner that deprives them of their right to enjoy these benefits,” the court went on to say.