United States District Court, E.D. Pennsylvania
AUSTIN MCHUGH UNITED STATES DISTRICT JUDGE
case involves alleged violations of the Fair Debt Collection
Practices Act by a debt buyer and the agency it hired to
pursue collection. Plaintiff alleges that the collection
letters she received from the defendants violated the FDCPA
because they were misleading-specifically, that the letters
implied the debts were legally enforceable, when in fact they
were not, and that the letters failed to communicate
effectively her right to dispute the validity of the debts.
In a joint Motion to Dismiss, the defendants dispute that
their letters violated the FDCPA, and assert that the debt
buyer defendant cannot be liable as a matter of law. The
threshold question is whether debt buyers which acquire
defaulted (and often time-barred) debt in order to collect
upon it qualify as “debt collectors” under the
Act. I conclude that they do, and further conclude that
Plaintiff has adequately alleged that the collection letters
violated the Act. Accordingly, the Motion to Dismiss will be
2016, Plaintiff Darla Norman received two nearly identical
letters from Defendant Allied Interstate, LLC, each
attempting to collect on an alleged debt. In the letters,
Allied stated that it was acting on behalf of Defendant LVNV
Funding, LLC, to collect the debts. LVNV had not lent Norman
any money-in fact, Defendants admit that the debts were
incurred originally to two non-party creditors more than
seven years earlier. But at some point after Norman allegedly
defaulted on the debts, LVNV purchased them from the
creditors (or from another debt buyer) and contracted with
Allied to collect on them. By May 2016, when Allied sent the
collection letters, the statute of limitations had run,
rendering both debts legally unenforceable. The letters each
listed the amount owed and the original creditor, and read in
Our client [LVNV] is interested in resolving this Account and
is willing to consider payment for less than the Amount Owed
to satisfy your obligation. Although we are not obligated to
accept any payment proposal, please telephone us to discuss
potential settlement options.
To make a payment, please telephone us at 866-466-3142 or
mail your payment . . . . [Y]our account will be debited on
the day we receive your payment. Your check will not be
Unless you notify us within 30 days after receiving this
letter that you dispute the validity of this debt . . . we
will assume that this debt is valid. If you notify us in
writing within 30 days after receiving this letter that you
dispute the validity of this debt, . . . we will obtain and
mail to you a verification of the debt or a copy of a
judgment. If you request of us in writing within 30 days
after receiving this letter, we will provide you with the
name and address of the original creditor, if different from
the current creditor.
We look forward to receiving your payment.
text in the letter appeared in the same size and font.
on these collection letters, Plaintiff Norman brings claims
under the Fair Debt Collection Practices Act, 15 U.S.C.
§§ 1692-1692p. She alleges that Defendants Allied
and LVNV violated Sections 1692e, which prohibits misleading
representations, and 1692g, which establishes protections and
notice procedures by which consumers can challenge and obtain
validation of the alleged debt. Compl., ECF No. 1. Together,
Defendants LVNV and Allied move for dismissal. Defs.'
Mot., ECF No. 7-1.
motion is governed by the well-established standards of Rule
12(b)(6), as amplified by Fowler v. UPMC Shadyside,
578 F.3d 203, 210 (3d Cir. 2009).
passed the FDCPA in an effort to end abusive debt collection
practices, acknowledging the “abundant evidence”
of “abusive, deceptive, and unfair” practices. 15
U.S.C. § 1692(a), (e). The Third Circuit has emphasized
that the FDCPA is a remedial statute that “must be
broadly construed in order to give full effect to these
purposes.” Caprio v. Healthcare Revenue Recovery
Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013).
state a claim under the FDCPA, Plaintiff Norman must
plausibly allege that (1) she is a consumer, (2) Defendants
are debt collectors, (3) Defendants' challenged
practice-the letters- involves an attempt to collect a debt
as the Act defines it, and (4) that Defendants violated the
FDCPA in attempting to collect the debt. See Tatis v.
Allied Interstate, LLC, 882 F.3d 422, 427 (3d Cir.
2018). Defendants dispute only the second and fourth
elements. Defs.' Mot. 6. LVNV disputes that it is a debt
collector, and both Defendants dispute that the letters
violated the Act. For the reasons that follow, I conclude
that LVNV is a debt collector under the Act, and that Norman
has adequately alleged two violations.
LVNV as a “debt collector” under the
are two ways in which a person or entity can qualify as a
“debt collector” under the FDCPA. See
§ 1692a(6). The first definition encompasses “any
business the principal purpose of which is the collection of
any debts.” Id. The second reaches any entity
that “regularly collects or attempts to collect,
directly or indirectly, debts owed . . . [to] another.”
§ 1692a. Plaintiff initially alleged that LVNV satisfied
both definitions, Compl. ¶¶ 5-6, but now argues
only that LVNV falls within the “principal
purpose” definition, Pl.'s Resp. 12. Defendant LVNV
counters that, as a debt buyer, it cannot be a debt collector
under either definition, and regardless, Plaintiff has not
alleged facts in support of the “principal
purpose” definition. Defs.' Mot. 7-8; Defs.'
Reply 6, ECF No. 14. I disagree and, for the reasons set