Afni, Inc. won judgment on the pleadings on October 28 in a Fair Debt Collection Practices Act suit in the Southern District of Indiana. Plaintiff Karl Glass alleged that a collection letter sent to him by Afni failed to identify the current creditor to whom the debt was owed, in violation of Section 1692g(a)(2) of the FDCPA. The Court sided with Afni, finding no fault with the letter despite its alleged ambiguities.
Glass argued that the letter’s identification of multiple creditors, without clearly establishing the current creditor, would confuse unsophisticated consumers. The letter described the debt as the “AFFIRM OPERATIONAL LOANS III TRUST account,” and listed the “original creditor” as “Cross River Bank.” Glass highlighted the letter’s failure to explain the relationship among Affirm, Cross River, and Afni, and the difference between the terms “current creditor” and “original creditor.” Glass also decried the letter’s lack of a clarifying line such as “current creditor to whom the debt is owed: [Entity].”
Afni countered that FDCPA caselaw construes “unsophisticated consumers” not as “dimwits,” but as individuals with “rudimentary knowledge about the financial world . . . capable of making basic logical deductions and inferences.” Afni then explained the inferences that could easily be drawn from the structure of the letter in order to argue that it had made a clear identification. For example, Afni outlined that “AFFIRM” was listed as the “creditor” at the top of the letter and that directly across from that listing, the letter stated “Your AFFIRM OPERATIONAL LOANS III TRUST account has been referred to Afni, Inc. for collection.” Given that the bottom of the letter described Cross River Bank as the “original creditor,” Afni argued there could be no reasonable, genuine confusion that Cross River Bank was the original creditor and that Affirm Operational Loans III Trust was the current creditor.
Agreeing with Afni, the Court held that as a matter of law, the letter did not violate the FDCPA. In the process of endorsing Afni’s arguments, the Court also noted that the payment remittance stub attached to the letter identified the “Creditor” as “AFFIRM OPERATIONAL LOANS III TRUST (Serviced by Affirm).” Most significantly, the Court held that the FDCPA does not require the “explicit use of the phrase ‘current creditor’” to ensure compliance with Section 1692g(a)(2). Since the letter contained no internal contradictions or inconsistencies as to the debt owed or to the creditor and it did not use technical terms such as “client,” “owner,” “assignee,” or “transferee” in potentially misleading manners, the Court granted Afni’s motion for judgment on the pleadings.
The case will serve as useful precedent for debt collecting entities who issue letters without the explicit phrase “current creditor.”