How Much Information is Too Much Information?
The Least Sophisticated Consumer is the phantom entity behind a lot of debt collection suits. This LSC – we’ll call him “Mike” – is the standard against which businesses practices are measured. If something seems too confusing to “Mike,” and the court agrees, it generally means the practice in question is at fault and the judge will find for the plaintiff.
“Mike”s are slippery in that it may not be clear, at first, to the collection agency, that their practice is confusing. There’s no standard list of “Least Sophisticated” practices. In a case out of New Jersey, the practice under scrutiny is making clear the relationship between the collector and creditor.
The deets
Glenn Ross, consumer, filed a complaint against Lyons, Doughty & Veldhuis, which I assume is from Game of Thrones. At issue is a collection letter LDV sent.
What did the plaintiff suggest was wrong?
Lyons, Doughty & Veldhuis, a debt collection law firm, sent a letter to Glenn Ross, owner of a credit card from Orchard Bank. Ross filed an FDCPA suit against LDV.
In his suit against LDV, Ross quoted the letter LDV sent – specifically, the subject line of the letter.
Re: Capital One Bank (USA), N.A., Assignee of HSBC BANK NEVADA N.A. RCS DIRECT MARKETING/ORCHARD BANK
That’s a mess of caps.
It sure is. And it doesn’t do a great job of explaining the relationship among all these entities. Let me see if I can untangle all this.
HSBC Bank is the originator of the credit card Ross had, which HSBC offered under the product name Orchard Bank. Orchard Bank credit cards were an option for people with bad credit. HSBC was eventually bought by Capital One Bank, who assumed a large portion of its credit card portfolio, including Orchard Bank accounts.
So maybe you figured this out way before I did, but that “Re:” line referenced in the court case states the chain of title for the debt: Capital One has been assigned a debt that originated with HSBC/Orchard Bank, and Capital One hired Lyons, Doughty & Veldhuis to sue on it.
So what was Ross’s claim?
Ross felt that the letter was unclear about who the original creditor was, especially through the lens of a Least Sophisticated Consumer – i.e., “Mike.” Per Ross’s suit, which was going to be a class action if it had succeeded, it was not clear to him or, potentially, others, as to who originally owned Ross’s debt.
Was Ross successful?
He sure thought he was going to be. However, the District of New Jersey, using a Delaware case as reference, decided that LDV’s letter was more than clear. (I…fine. I didn’t find the letter clear at all, but I’m glad the agency in the case was successful in its counter-claim.)
New Phone Who Dis?
The debt industry has been trying to reach a workable solution for reassigned numbers – numbers that may start off with one consumer, but then end up with another. The risk for collection agencies is in contacting the wrong consumer about the wrong debt, and incurring a third-party disclosure violation.
The FCC released a report with what it thinks might be the beginnings of some help.
The deets
We might be seeing an FCC-produced reassigned number database.
Hooray!
Maybe! I mean, this is the FCC that is currently headed by Ajit Pai, a man in love with himself and who has worked tirelessly to make the Internet a worse place for users. (You might this article, from today, of some schadenfreudesque enjoyment: Ajit Pai admits Russia interfered in net neutrality process amid lawsuit.)
The panel wanted everyone to make sure everyone understood, by the way, that the FCC’s database in no way supplants commercial options, which is a neat slide away from responsibility. “We made this thing but we don’t want you to depend on it.”
