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Frias v. MRS Associates, Inc.

2011 WL 5599984 (U.S. Dist. Ct. D. N.J. 2011) (Unpublished)

FDCPA — Under the Fair Debt Collection Practices Act, a debt collector is not required to tell the debtor how it acquired the account, only to tell the consumer of the name of the creditor to whom the debt is owed; the debtor’s consent to an assignment of the debt is not required; and the Act neither prohibits offers or settlement nor requires specific payment options to be offered.

A debtor received a collection letter regarding a debt that was the originally owed to a bank. The debtor believed it had been assigned to the collection agency. The collection agency responded that it was a third-party collector on behalf of the bank. The collection agency claimed it had sent an initial letter notifying the debtor that her account had been placed for collection and that she had 30 days to dispute the debt. The debtor denied receiving this letter. Thus she claimed that a later letter was her initial contact. The debtor sued, alleging that the later letter contained multiple misstatements that were considered deceptive to any consumer. The collection agency moved to dismiss.

On a motion to dismiss for failure to state a claim, a court is required to construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief. Here, the debtor alleged that the first letter did not reference how the debt collectors obtained her account. However, the Court stated that the Fair Debt Collection Practices Act (FDCPA) does not require a debt collector to provide information as to how it acquired the account. It only needs to inform the consumer of the name of the creditor to whom the debt is owed. Therefore there was no basis for this alleged violation.

The debtor also argued that she did not consent to or ratify any assignment of the alleged debt. The Court noted that the FDCPA does not require the consumer to consent to the creditor’s hiring of a debt collection agency or to the assignment of a debt to another party. Therefore, there was also no basis for a violation. The debtor then contended that the letter she received offered a substantial reduction in the debt balance, but did not offer any payment options. The Court held that the FDCPA neither prohibits settlement letters nor requires specific payment options to be set forth. Therefore this claim was also dismissed.

However, the motion to dismiss the consumer’s remaining claims was denied because, accepting her allegation that the letter she received was the initial contact, her allegation that it did not include language advising that she had the right to dispute the debt within thirty days of receipt stated a valid claim under the statute.

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