7th Circuit finds Indiana man’s debt collection claims ‘meritless’

A man who unsuccessfully sued a collection agency alleging the information provided in a letter violated the Fair Debt Collection Practices Act lost his appeal Monday, with a federal appeals panel finding his claims “meritless.”

The 7th Circuit Court of Appeals affirmed a district court judgment on the pleadings in favor of credit agencies and other defendants in Thomas Dennis, Jr. v. Niagara Credit Solutions, Inc., et al., 19-1654.

The panel dismissed Thomas Dennis Jr.’s argument that Niagara Credit Solutions and affiliated parties violated the FDCPA by listing the original and current creditors in a letter to Dennis. “The FDPCA requires that a debt collector send the debtor a written notice containing ‘the name of the creditor to whom the debt is owed,’” Judge Joel Flaum wrote for the panel. “Because the letter accurately and clearly identified the creditor to whom Dennis’s debt was owed, we affirm the district court’s judgment on the pleadings in favor of defendants.”

The letter identified Washington Mutual Bank as the original creditor and LVNV Funding as the current creditor, and Niagara’s letter stated that its “client” had authorized it to offer Dennis a settlement or payment plan on a defaulted debt to the bank. The panel ruled that the district court properly ruled against Dennis’ putative class action.

“This is a meritless claim,” Flaum wrote, noting that the unsophisticated-consumer standard governing claims under the FDCPA was not met here, because such a consumer would have inferred that LVNV purchased the bank’s debt and Niagara was acting on LVNV’s behalf.

“The district court noted that the letter could have made the relationships among the parties ‘crystal clear’ by spelling out that LVNV had purchased the debt from Washington Mutual and that LVNV was Niagara’s client. While such language may have helped clarify the party’s relationships, § 1692(g)(a)(2) does not require such a detailed explanation of the transactions leading to the debt collector’s notice. Rather, it requires clear identification of the current creditor, and this letter complied,” the panel held.

“… (W)here, as here, the letter accurately and clearly identified the creditor to whom Dennis’s debt was owed, no evidence of confusion could change the result. The district court was correct to enter judgment on the pleadings.”

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