In Koller v. West Bay Acquisitions, LLC, 2012 WL 1189481 (N.D.Cal. 2012), Judge Breyer held that vague references to ‘further action’ in the collection context could be interpreted by the least sophisticated consumer as threats to make false credit reporting.Yes, that’s what he held.
Section 1692e(5) prohibits “threat[s] to take any action that cannot legally be taken or that is not intended to be taken” in debt collection. 15 U.S.C. § 1692e(5). Plaintiff alleges that Defendants violated § 1692e(5) by threatening adverse credit reporting, which is prohibited by the Order. Compl. at 12–13. Specifically, the Order prohibits Defendants from “stat[ing], suggest [ing], imply[ing] or otherwise represent[ing] to any customer that their refusal to pay … could result in adverse credit reporting.” Safier Decl. Ex. A, at 5.¶Defendants argue that reference to “continued collection efforts” is not a false threat to report the debt to credit reporting agencies because the words “credit reporting” are not used in the letter at all. Mot. at 13. However, even vague language can constitute a threat when it “create[s] the impression that … action by defendant is a real possibility.” Baker v. G.C. Servs. Corp., 677 F.2d 775, 779 (9th Cir.1982). The debt collector need not make an explicit statement or threat in order to violate § 1692e(5). See Quicho v. Mann Bracken, LLC, C07–3478 BZ, 2007 WL 2782971, at *2 (N.D.Cal. Sept.25, 2007). Additionally, here, even less-than-explicit threats can violate the Order because it prohibits even an implication or suggestion of adverse credit reporting. ¶Courts apply § 1692e(5) most often in the context of threats of legal action, rather than credit reporting, and have consistently found that vague threats to take “further action,” for example, can imply that the debt collector will take legal action. See, e.g., Canlas v. Eskanos & Adler, P.C., No. C 05–00375 JF, 2005 U.S. Dist. LEXIS 43380, at *7–8 (N.D.Cal. July 6, 2005). As one court explained, “[T]he least sophisticated debtor would be reasonable to interpret the threat of ‘further steps’ to mean legal action. Indeed, given our rather litigious society, an individual not well versed in the mechanics of debt collection may very well consider legal action to be the next possible-and probable-‘step.’ “ Perretta v. Capital Acquisitions & Mgmt. Co., No. C–02–05561 RMW, 2003 U.S. Dist. LEXIS 10070, at * 15 (N.D.Cal. May 5, 2003). The court also noted that the “vague nature of defendant’s statement lends itself to such an interpretation.” Id. ¶If the least sophisticated debtor could read vague references to further collection actions as a threat to take future legal action, then the least sophisticated debtor surely could read “continued collection efforts” to include adverse credit reporting, as credit reporting is one of the most commonly taken steps in debt collection efforts. Accordingly, Plaintiff has stated a claim for violation of § 1692e(5).
At least Judge Breyer got it right on the applicability of the UCL to an FDCPA/Rosenthal Act claim, holding that the FDCPA/Rosenthal Act was not a proper vehicle to lodge a UCL claim because no money was lost as a result of the unfair competition.
Claims may be brought under the UCL only by those who have “suffered injury in fact and ha[ve] lost money or property as a result of the unfair competition.” Cal. Bus. & Prof.Code § 17204. A plaintiff has suffered an injury in fact for purposes of the UCL when he or she has “(1) expended money due to the defendant’s acts of unfair competition, (2) lost money or property, or (3) been denied money to which he or she has a cognizable claim.” Chao v. Aurora Loan Servs., LLC, No. 10–03383 SBA, 2011 WL 6963098, at *11 (N.D.Cal. Sept.13, 2011) (citing Hall v. Time Inc., 158 Cal.App.4th 847, 70 Cal.Rptr.3d 466, 470–71 (Ct.App.2008)).¶Plaintiff does not allege that he has expended, lost, or been denied any money as a result of Defendants’ actions. Moreover, contrary to Plaintiff’s assertions, the fee required to file the instant suit does not satisfy the injury in fact requirement. If a filing fee were sufficient, then the injury in fact requirement would be meaningless because “any plaintiff filing suit would be able to show injury.” Selby v. Bank of Am., Inc., No. 09cv2079 BTM(JMA), 2010 WL 4347629, at *8 (S.D.Cal. Oct. 27, 2010); cf. Palmer v. Stassinos, 419 F.Supp.2d 1151, 1154 (N.D.Cal.2005) (“It is undisputed that plaintiff did not lose money or property as a result of [the defendant sending letters that violated the FDCPA], nor has she suffered any other cognizable injury in fact.”). For the same reason, the time and money Plaintiff spent in preparing for and filing this suit cannot satisfy the injury in fact requirement. FN3 Accordingly, Plaintiff’s UCL claim is dismissed for lack of standing.