What’s In A Name?

On November 1, the Eleventh Circuit Court of Appeals declined to elevate form over substance, affirming a ruling from the United States District Court for the Southern District of Florida dismissing a consumer’s FDCPA claim that a law firm’s collection letter failed to identify accurately the name of the creditor to whom the debt was owed.

In Leonard v. Zwicker & Associates, P.C., Zwicker mailed Leonard an initial letter seeking payment of an American Express Gold Card credit card account. The letter identified “American Express” as the creditor to whom the debt was owed. Leonard claimed this was inaccurate and violated 15 U.S.C. § 1692g(a)(2), because multiple entities identify themselves as “American Express” and the letter left him unsure of which entity claimed entitlement to the account. The district court granted Zwicker’s motion to dismiss Leonard’s claims, and Leonard appealed.

With respect to Leonard’s §  1692g(a)(2) claim, the Eleventh Circuit began by stating that while the FDCPA requires a debt collector to identify the creditor to whom the debt is owed with sufficient clarity “that the recipient is likely to understand it,” the FDCPA does not require debt collectors to “use a creditor’s full business name or its name of incorporation.” Indeed, the Court observed that under some circumstances, using the creditor’s full business name “would not always result in greater clarity to a naïve consumer, who may be more familiar with a commonly used trade name.” Noting that the Federal Trade Commission has issued commentary stating that a debt collector complies with § 1692e(14)’s obligation to use its “true name” by using its full business name, the name under which it usually transacts business, or a commonly-used acronym, the Eleventh Circuit applied the same logic to Leonard’s argument, and rejected the adoption of a bright-line rule requiring debt collectors to “always identify the creditor by its full business name” in order to comply with § 1692g. Instead, the Court adopted the FTC’s approach, holding that a debt collector may use a creditor’s full business name, the name under which the creditor usually transacts business, or a commonly used acronym. Finding that “American Express” satisfied those criteria, the Court affirmed the district court’s dismissal of Leonard’s claim under § 1692g.

The Court employed similar logic in affirming dismissal of Leonard’s § 1692e(10) claim. The Court observed that a least sophisticated consumer is likely unfamiliar with American Express Company’s internal corporate structure, and thus no more likely to be confused by “American Express” than by “American Express Centurion Bank” *the owner and servicer of Leonard’s account) or “American Express Receivable Financing Corporation III LLC” (the owner of just the receivable). On this basis the Court agreed that identifying the creditor as “American Express” was not misleading to the least sophisticated consumer.

The Leonard decision creates a sensible rule that protects the ability of debt collectors to identify creditors as they are likely to be known to their customers. Importantly, this rule does not diminish the duty of debt collectors to identify the creditor clearly in an FDCPA validation notice.