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Debt Collection Letter Interplay With 1681c: Hipolito

Posted: Sat Jan 14, 2006 6:26 pm
by David A. Szwak
Hipolito v. Alliance Receivables Management, Inc.
Slip Copy, 2005 WL 1662137
Jul 15, 2005

4. Seven-Year Language
*8 Hipolito asserts that the seven-year language violates the FDCPA because it is a misstatement of the law and constitutes an implicit threat Defendant will report Hipolito to a credit bureau. Defendants assert that Plaintiff's position is unsupported by any authority. The Court agrees.
First, there is no authority that suggests the seven-year language misstates the law in any way. Rather, it is consistent with the Fair Credit Reporting Act ("FCRA"), which provides that "no consumer reporting agency may make any consumer report containing ... [a]ccounts placed for collection or charged to profit and loss which antedate the report by more than seven years." 15 U.S.C. ยง 1681c(a)(4).
Second, the mere reference to credit reporting is not, by itself, a violation of the FDCPA. See Harvey v. United Adjusters, 509 F.Supp. 1218, 1221 (D.Or.1981) (holding that FDCPA was not violated where notice said, "[y]our credit is a valuable asset. Pay your bills and retain good credit"); Spira v. Ashwood Financial, Inc., 358 F.Supp.2d 150, 160 (E.D.N.Y.2005) (holding that FDCPA was not violated where collection letter stated that it was the defendant's policy "to report all unpaid accounts to a major credit bureau after 30 days of this notice" and noting that "[t]he letter states that it is a collection letter and to the extent that it threatens action, it merely reflects Defendant's policy, unrelated to Plaintiff's response, and reinforces the widely known fact that failure to pay debts that are owed might adversely affect one's credit rating and ability to obtain credit"); Wright v. Credit Bureau of Georgia, Inc., 555 F.Supp. 1005, 1007 (N.D.Ga.1983) (holding that there was no violation of the FDCPA where name of collection bureau included the words "credit bureau," reasoning that "the text of each letter sent by the defendants and the appearance of the name 'CBI COLLECTIONS' at the bottom of each letter and on the return envelope sufficiently inform the consumer that he has received only a dunning letter and not a threat to relay credit information to a credit reporting agency. If the defendants' letters contain any threat to a consumer's credit rating, the threat is at most a statement that the results of the defendants' collection efforts may some day affect the debtor's credit rating. Thus the letters convey no specific threat greater than the well-known fact, recognized by all consumers, regardless of the degree of their sophistication, that a failure to pay one's bills will affect his ability to obtain credit in the future"). Therefore, Plaintiff's complaint fails to the extent it is based on the seven-year language.