Plaintiffs, represented by Philipps and Philipps Ltd., brought an action against Alltran and LVNV Funding, LLC, alleging that their debt collection letters were unclear as to whether Alltran was collecting on behalf of Defendant LVNV or nonparty Springleaf Financial Services. This confusion allegedly violated 15 U.S.C. § 1692g(a), which requires, among other things, that a debt collector “send the consumer a written notice containing . . . the name of the creditor to whom the debt is owed.”
The letter listed as the “Original Creditor” nonparty Springleaf Financial Services Inc., from whom Mr. Taylor had previously borrowed money. Next, the letter stated that the “Current Creditor” was Defendant LVNV Funding, LLC (“LVNV”). Finally, below this information, the letter explained that “Alltran Financial, LP has been contracted to lead and represent in the collection of the judgment awarded on your Springleaf Financial Services Inc. account.”
In the first opinion on Sept. 17, judge Jane Magnus-Stinson analyzed whether the action meets the the requirements of Rule 23. The court rejected defendants arguments regarding the notion some of the debts may have been non-consumer in nature, and certified the following class:
All persons similarly situated in the State of Indiana from whom Defendants attempted to collect a defaulted consumer debt allegedly owed for a Springleaf Financial Services account, via the same form collection letter that Defendants sent to Plaintiff, from February 1, 2017 to the present.
In the second opinion issued on Sept. 19, the court rejected defendants’ motion for judgment on the pleadings. In so holding, the court noted that:
Several problems are manifest. First, the letter says that Alltran has “been contracted to lead and represent in the collection of the judgment.” Contracted by whom?, an unsophisticated (or perhaps even a sophisticated) consumer might ask. The ostensible answer comes at the end of the sentence: “the judgment awarded on your Springleaf Financial Services Inc. account.” [Filing No. 1-3 at 1.] Of course, based upon the facts of this lawsuit it is now clear that LVNV acquired the debt at some point from Springleaf, but for all intents and purposes the letter makes it sound like Springleaf is the one who contracted Alltran and that Mr. Taylor still has a “Springleaf Financial Services Inc. account” on which Alltran is attempting to collect.
This not-so-subtle wrinkle sets this case far apart from Zuniga v. Asset Recovery Solutions, 2018 WL 1519162 (N.D. Ill. 2018), the case heavily relied upon by Defendants.
Defendants are represented by Ballard Spahr LLP and Kroger Gardis & Regas, LLP.