In Boyle v. Arrow Financial Services, LLP, 2008 WL 4447727 (N.D.Cal. 2008), Judge Hamilton addressed whether a debt collector violates the FDCPA by including the following language in a collection letter:
The letter also stated: “As required by law, you are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligations.
The Notice provided in the collection letter derives from both federal and state credit reporting laws:
See 15 U.S.C. § 1681s-2(a)(7) (“In general, if any financial institution that extends credit and regularly and in the ordinary course of business furnishes information to a consumer reporting agency … furnishes negative information to such an agency regarding credit extended to a customer, the financial institution shall provide a notice of such furnishing of negative information, in writing, to the customer.”); Cal. Civ.Code § 1785.26(b) (“A creditor may submit negative credit information concerning a consumer to a consumer credit report agency, only if the creditor notifies the consumer affected.”).
The District Court rejected all of the plaintiff’s claims, and granted the defendant’s Motion to Dismiss. The District Court held that (1) the Notice did not claim, under the least sophisticated consumer test, that the Defendant implied that it would submit a negative credit report or that it was required by law to submit such report (citing Cruz v. MRC Receivables Corp., No. C-07-5688 SC, 2008 WL 2627143, at *9 (N.D.Cal. July 3, 2008) (stating, in response to the same interpretation of the same notice provision, that the interpretation “simply misstates the notice”) (2) the Notice did not falsely claim that the Defendant was required by law to send the notice; and (3) the Notice was not coercive.
The notice provision sent by [Defendant] is not an action similar to the types of abusive tactics that Congress sought to prevent. It is not dishonest, threatening, or disruptive. It is only one letter. At most, it is the fifth collection letter Boyle has received from WaMu, Arrow, and Nelson over at least a six-month period. Over the ordinary course of business, most people receive credit card statements once a month. Thus, this allegation is not plausible on its face and also fails to survive a 12(b)(6) motion to dismiss.