Written by Matt Loker, Heritage Attorney
On September 3, 2015, the Honorable Stephen V. Wilson of the United States District Court, Central District of California entered Judgment in favor of a Heritage Credit Repair client and against the Credit Bureau of Santa Maria (“CBSM”). At issue in this action was the following statement in CBSM’s collection letter:
Matthew M. Loker, Esq. of the Kazerouni Law Group, APC alleged on behalf of the consumer that this language violated the Fair Debt Collection Practices Act as well as the Rosenthal Fair Debt Collection Practices Act by utilizing language that was (i) harassing and oppressive; and, (ii) misleading.
Following briefing and oral argument by the parties, the Court stated that the “Ninth Circuit [Court of Appeals] applies the ‘least sophisticated debtor’ standard to [such claims]. Under this standard, the Court must consider whether [CBSM]’s conduct is ‘likely to deceive or mislead a hypothetical ‘least sophisticated debtor.’” Furthermore, the Court also explained that “[a] statement is deceptive where it can reasonably be read to have two or more different meanings, one of which is inaccurate.”
Here, the Court found that CBSM’s language in the collection letter could mislead the “least sophisticated consumer” to believe that the debt collector could not only report the nonpayment of a debt, but also the specific reasons for nonpayment. Namely, that a debtor’s nonpayment was made “without reason” and that the debtor evidently “[doesn’t] care about [his] credit record. For those reasons, Judge Wilson entered judgment in favor of Heritage Credit Repair’s client in the amount of $5,001.00 – nearly three times the maximum amount allowed by law.
If you or someone you know is dealing with collection efforts and would like to speak with Mr. Loker, please call us at 805.619.5131 today.