Tourgeman v. Collins Financial Servs.

A debt collector cannot present misleading information that is material in the collection of their debt; and, under section 1692e of the Fair Debt Collection Practices Act, a debt collector is liable if the least sophisticated debtor would be misled by a communication.

After David Tourgeman financed a new Dell computer through Dell Financial Services (“DFS”), DFS sold the debt to Collins Financial Services (“CFS”). CFS’s collection agency, Paragon Way, Inc., sent three letters to Tourgeman seeking payment of the debt. The law firm of Nelson & Kennard also sent Tourgeman a letter and filed a complaint against him attempting to collect the debt. Tourgeman brought an action under the Fair Debt Collection Practices Act (“FDCPA”) arguing that the original creditor was misidentified in CFS, Paragon Way, Inc., and Nelson & Kennard’s (collectively “defendants”) efforts to collect the debt. The district court granted summary judgment to the defendants and Tourgeman subsequently appealed the action. The Ninth Circuit reversed the district court’s decision, reasoning that the defendants did violate the FDCPA by falsely identifying the original creditor in the letters sent to Tourgeman and in the complaint filed against him. The defendants were liable under § 1692e of the FDCPA because “the least sophisticated debtor would likely be misled by their communication.” The misleading identity of the original creditor was material and warranted reversal of the summary judgment granted to the defendants because the defendants used false information that would likely have misled some consumers. REVERSED and REMANDED.