SW Legal Educational Publishing

Use of Alias by Debt Holder to Collect Debt Triggers FDCPA
Description Citicorp sent letter to non-paying debtor from "Debtor Assistance." Since that gave the least sophisticated consumer reason to believe Citicorp had assigned the debt, the FDCPA applied to Citicorp even though it was in-house debt collection.
Topic Consumer Protection
Key Words FDCPA, Credit, Least Sophisticated Consumer
C A S E   S U M M A R Y
Facts Maguire, a credit card holder at Bradlees, a retail store chain, fell behind on her payments. Bradlees accounts were operated by Citicorp, which sent Maguire various dunning letters. Having failed to pay, she received a letter from "Debtor Assistance," saying that "your Bradlees account has recently [been] charged off" and offering her a payment schedule. Debtor Assistance is a unit of Citicorp that handles accounts that have been written off but not yet assigned to a collection agency. Maguire did not pay but filed for bankruptcy. She sued Citicorp for violation of the FDCPA. District court dismissed the complaint; Maguire appealed.
Decision Reversed. For purposes of the FDCPA, Citicorp was using an alias when it sent a letter from Debtor Assistance. Under the law, the creditor is supposed to reveal its true identity-- if it had done so, it would have been in-house collection, which is exempt from FDCPA. Since a "least sophisticated consumer" would have the impression that a third party was collecting the debt, and not Citicorp, the FDCPA was triggered.
Citation Maguire v. Citicorp Retail Services, Inc., 147 F.3d 232 (2nd Cir., 1998)

Back to Consumer Protection Listings

©1997-2000  South-Western, a division of Cengage Learning, Inc. Cengage Learning is a trademark used herein under license.