In De Amaral v. Goldsmith & Hull, 2014 WL 572268 (N.D.Cal. 2014), Judge Orrick granted summary judgment to an FDCPA Plaintiff who found falsity in a debt buyer’s identification in the state court complaint that it was an entity to whom the plaintiffs are “indebted” and who “provided” credit pursuant to a “written agreement.” Judge Orrick found that allegation deceptive since the debt collector was a debt assignee rather than the original creditor.
Under the least sophisticated consumer test, the language used here is material because it “can be reasonably read to have two or more different meanings, one of which is inaccurate.” Gonzalez, 660 F.3d at 1061–62 (internal quotation omitted). The state court complaint may be read to represent that LHR is a creditor “who offers or extends credit creating a debt or to whom a debt is owed” rather than a debt collector that “receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.” 15 U.S.C.A. § 1692a(4). This representation runs afoul of the FDCPA’s definition of creditor, which explicitly excludes debt collectors. Id. (“The term ‘creditor’ means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.”) (emphasis added). LHR does not identify itself as an assignee of the debt anywhere in the state court complaint. Nor does it identify or refer to Wells Fargo, the creditor. On the contrary, it identifies itself as an entity to whom the plaintiffs are “indebted” and who “provided” credit pursuant to a “written agreement.” These words may give the least sophisticated consumer a misleading impression that the relationship between the plaintiffs and L HR is that of a debtor to a creditor, rather than a debtor to a debt collector. The least sophisticated consumer might assume that no system of justice would allow her to be found liable to a company that claimed it had contracted with her when the consumer knew she had never done so. For these reasons, the defendants used a “false, deceptive, or misleading representation” in the state court complaint in violation of FDCPA § 1692e.