• Eleventh Circuit Court of Appeals Addresses Term “Creditor” as Defined by FDCPA
  • April 9, 2012 | Authors: Elizabeth K. Devine; Corinne C. Heggie
  • Law Firms: Hinshaw & Culbertson LLP - New York Office ; Hinshaw & Culbertson LLP - Chicago Office
  • In Bourff v. Rubin Lublin, LLC, --- F.3d ---, 2012 WL 971800 (11th Cir. 2012), the U.S. Court of Appeals for the Eleventh Circuit addressed the term “creditor” as defined under the Fair Debt Collection Practices Act (FDCPA). The debtor in Bourff,  failed to make a payment on his loan originally held by America’s Wholesale Lender (AWL), causing a default under the terms of the note. AWL later assigned the loan to BAC Home Loan Servicing, LP f/k/a Countrywide Home Loans Servicing LP (BAC) for the purpose of collecting on the note. BAC hired Rubin Lublin, LLC (Rubin) to help collect on the loan. Rubin sent Bourff a notice stating it was an attempt to collect a debt pursuant to the FDCPA identifying BAC as the “creditor.”

    Bourff sued Rubin for violating §1692(e) and alleged that it was false to represent BAC as the creditor in the notice. Rubin moved to dismiss under Rule 12(b)(6) and the district court granted the motion. The district court concluded that BAC was a creditor according to the “ordinary meaning” of the term and that even if BAC was not a creditor, the error identifying BAC as such on the FDCPA notice was “harmless.” Bourff appealed.

    The Eleventh Circuit vacated the dismissal and remanded it. The Court noted that the Complaint alleged that BAC received the assignment in June 2009, after the debt was in default. The court also relied on the FDCPA’s definition of creditor found at §1692a(4). In light of the facts and the definition, the court concluded that the FDCPA’s creditor exemption did not apply to BAC. Since the creditor exemption did not apply, the court concluded, based on the facts alleged in plaintiff’s Complaint, the pleading did state a claim upon which relief may be granted for Rubin’s identification of BAC as the creditor in its notice.