Use of Alias by Debt Holder to Collect Debt Triggers FDCPA

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)

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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)