Vincent v. The Money Store

11-4525
Vincent v. The Money Store
UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT
_______________

August Term, 2012

(Argued: November 8, 2012 Decided: November 13, 2013)

Docket No. 11-4525-cv

_______________

LORI JO VINCENT, RUTH ANN GUTIERREZ, LINDA U. GARRIDO, JOHN GARRIDO,
on behalf of themselves and all others similarly situated,

Plaintiffs-Appellants,

JOSEPH MAZZEI,

Plaintiff,

—v.—

THE MONEY STORE, TMS MORTGAGE, INCORPORATED, HOMEQ SERVICING
CORPORATION,
MOSS, CODILIS, STAWIARSKI, MORRIS, SCHNEIDER & PRIOR, LLP,

Defendants-Appellees.*

_______________

*The Clerk of the Court is directed to amend the caption of this case as set forth
above.
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Before:

KATZMANN, Chief Judge, LIVINGSTON, and LOHIER, Circuit Judges.

_______________

Appeal from a judgment of the United States District Court for the
Southern District of New York (Koeltl, J.), dismissing plaintiffs’ claims under the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the
Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. With respect to plaintiffs’
FDCPA claims, we hold that where a creditor that is collecting its own debts hires
a law firm to mail thousands of letters to debtors that misleadingly indicate that
the law firm has been retained to collect the creditor’s debts, and where the law
firm has not engaged in any other bona fide efforts to collect those debts, the
creditor can be held liable for violating the FDCPA pursuant to the statute’s false
name exception to creditor immunity. 15 U.S.C. § 1692a(6). Here, given the
disputed issues of fact regarding the law firm’s role in the collection process, we
conclude that the district court erred in granting summary judgment in favor of
defendants-appellees on plaintiffs’ FDCPA claims. With respect to plaintiffs’
TILA claims, we hold that because defendants were assignees of the plaintiffs’
mortgages and were not the persons to whom the mortgages were initially
payable as reflected on the face of the loan documents, the district court correctly
concluded that the defendants were not “creditors” under TILA and cannot be
held liable for violating its provisions. 15 U.S.C. § 1602(g). For the reasons stated
below, the judgment of the district court is AFFIRMED in part, VACATED in
part, and REMANDED for further proceedings consistent with this Opinion.

Chief Judge KATZMANN concurs in a separate opinion. Judge LIVINGSTON
concurs in part and dissents in part in a separate opinion.
_______________

PAUL S. GROBMAN (Neal DeYoung, Sharma & DeYoung LLP, on
the brief), New York, NY, for Plaintiffs-Appellants.

DANIEL A. POLLACK (Edward T. McDermott, W. Hans Kobelt, on
the brief), McCarter & English, LLP, New York, NY, for
 Defendants-Appellees The Money Store, TMS Mortgage, Inc.,
Homeq Servicing Corp.

DAVID J. CHIZEWER, Goldberg, Kohn, Bell, Black, Rosenbloom &
Moritz, Ltd., Chicago, IL, for Defendant-Appellee Moss, Codilis,
Stawiarski, Morris, Schneider & Prior, LLP.
_______________

KATZMANN, Chief Judge:

This case requires us to determine if the consumer protections of the Fair

Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the Truth

in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., apply to a mortgage lender that

has purchased mortgages initially payable to other lenders and, after the

homeowners defaulted on their mortgages, hired a law firm to send allegedly

deceptive debt collection letters on its behalf. Plaintiffs-Appellants Lori Jo

Vincent, Ruth Ann Gutierrez, Linda Garrido, and John Garrido (collectively, the

“plaintiffs”) appeal from a judgment of the United States District Court for the

Southern District of New York (Koeltl, J.), which granted defendants’ motion for

summary judgment on plaintiffs’ TILA claims and denied plaintiffs’ motion for

reconsideration of the district court’s (Sprizzo, J.) earlier dismissal of their

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FDCPA claims against Defendants-Appellees The Money Store, TMS Mortgage,

Inc., and HomeEq Servicing Corp. (collectively, “The Money Store”).

With respect to plaintiffs’ FDCPA claims, although creditors are generally

not considered debt collectors subject to the FDCPA, the statute contains an

exception to creditor immunity where the creditor, “in the process of collecting

[its] own debts, uses any name other than [its] own which would indicate that a

third person is collecting or attempting to collect such debts.” 15 U.S.C.

§ 1692a(6). Plaintiffs contend that The Money Store used the name of the law

firm Moss, Codilis, Stawiarski, Morris, Schneider & Prior, LLP (“Moss Codilis”)

by hiring the law firm to send out collection letters that falsely indicated that

Moss Codilis had been retained to collect the debts The Money Store was in fact

collecting. The district court rejected that argument, finding that The Money

Store had not used a name other than its own, and therefore could not be found

liable for violating the FDCPA through the so-called false name exception.

Similarly, with respect to plaintiffs’ TILA claims, the district court found

that The Money Store could not be held liable under TILA for charging plaintiffs

unauthorized fees on their accounts and failing to refund the resulting credit

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balances. TILA applies only to a “creditor,” which is defined in the statute as the

person to whom the debt is initially payable. 15 U.S.C. § 1602(g).1 Because The

Money Store was an assignee of the plaintiffs’ notes, and therefore not the person

to whom the debts were initially payable, the district court determined that The

Money Store did not qualify as a creditor under TILA.

For the reasons set forth below and resolving all factual disputes in

plaintiffs’ favor, we respectfully first hold that the district court erred in

concluding that The Money Store was not a “debt collector” under the false name

exception to FDCPA liability. Where a creditor, in the process of collecting its

own debts, hires a third party for the express purpose of representing to its

debtors that the third party is collecting the creditor’s debts, and the third party

engages in no bona fide efforts to collect those debts, the false name exception

exposes the creditor to FDCPA liability. With respect to the TILA claims,

however, we conclude that the district court correctly determined that, because

plaintiffs’ mortgage documents did not name The Money Store as the person to

whom the debt was initially payable, The Money Store is not a “creditor” under

1 The district court’s decision refers to 15 U.S.C. § 1602(f). Since then, subsection
(f) has been recodified at subsection (g).

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TILA and is therefore not subject to liability. Accordingly, we affirm the

judgment of the district court in part, vacate in part, and remand the case for

further proceedings consistent with this Opinion.

BACKGROUND

I. Factual Background

The following facts are drawn from the record before the district court and

are undisputed unless otherwise noted:

Plaintiffs-Appellants are homeowners who defaulted on their mortgages.

The Money Store, a mortgage lender, serviced the loans on which plaintiffs

defaulted.

A. The Plaintiffs’ Mortgages

Plaintiff Lori Jo Vincent took out a mortgage loan on her home in

Carrollton, Texas on February 16, 1998. She executed a promissory note and a

deed of trust with her lender, Accubanc Mortgage Corporation. In the

promissory note Vincent agreed:

In return for a loan that I have received, I promise to pay U.S.
$67,600.00 (this amount is called “principal”), plus interest, to the
order of the Lender. The Lender is ACCUBANC MORTGAGE
CORPORATION. I understand that the Lender may transfer this
Note.

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J. App’x 851. In addition, the deed of trust states:

Borrower [Vincent] owes Lender [Accubanc] the principal sum of
SIXTY-SEVEN THOUSAND SIX HUNDRED and NO/100 ----
Dollars (U.S. $ 67,600.00). This debt is evidenced by Borrower’s note
dated the same date as this Security Instrument (“Note”), which
provides for monthly payments, with the full debt, if not paid
earlier, due and payable on March 1, 2028. This Security Instrument
secures to Lender [Accubanc]: (a) the repayment of the debt
evidenced by the Note, with interest, and all renewals, extensions
and modifications of the Note . . . .

J. App’x 857. Neither the promissory note nor the deed of trust mentions The

Money Store.

At the time of the loan’s execution on February 16, 1998, Accubanc gave

Vincent the disclosure statement required by TILA, 15 U.S.C. § 1631.2

Immediately after executing the mortgage, Accubanc transferred its interest in

the loan to EquiCredit Corporation of America by endorsing the promissory note

to EquiCredit. Two-and-a-half months later, on April 30, 1998, EquiCredit

assigned and endorsed the note and deed of trust to The Money Store, which is

reflected on the note with a stamp that reads “Without Recourse Pay to the Order

2TILA requires creditors to disclose clearly certain terms of a mortgage,
including, inter alia, the annual percentage rate and finance charge. See 15 U.S.C.
§ 1632; see also 15 U.S.C. § 1604; 12 C.F.R. §§ 226.17-20.

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of TMS Mortgage Inc.” Vincent’s first loan payment was due on April 1, 1998,

before the note had been assigned to The Money Store.

On April 5, 1997, plaintiff Ruth Gutierrez took out a mortgage loan on her

home in Stockton, California. Gutierrez executed a note and deed of trust

identifying the lender as First Financial Funding Group and using language very

similar to the loan documents described above for Vincent’s mortgage. Again,

neither of these documents mentions The Money Store. At the time First

Financial and Gutierrez executed the loan, First Financial also gave Gutierrez the

TILA-required disclosure statement. Two days later, on April 7, 1997, First

Financial assigned and endorsed the note and deed of trust to The Money Store.

Gutierrez’s first loan payment was due on May 10, 1997, meaning that

Gutierrez’s first payment, unlike Vincent’s, was not due until after the loan had

been assigned to The Money Store.

On May 22, 1996, plaintiffs Linda and John Garrido took out a $100,000

mortgage loan on their home in Huntington Station, New York. The promissory

note they executed on that date again used language similar to the notes

applicable to the other loan transactions, and listed FHB Funding Corporation as

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their lender. The Garridoses additionally signed a mortgage that referenced the

note and identified FHB Funding as the “Lender” and the Garridoses as the

“Borrower.” Once again, neither the note nor the mortgage mentions The Money

Store. Like Vincent and Gutierrez, the Garridoses also received the TILA-

required disclosure statement from FHB Funding at the time they executed the

loan. Three weeks later, on June 13, 1996, FHB Funding assigned and endorsed

the note and mortgage to The Money Store. The Garridoses’ first loan payment

was due on July 1, 1996, i.e., two weeks after the loan had been assigned to The

Money Store.

After the loans had been assigned to The Money Store, plaintiffs all

eventually defaulted on their mortgages. They subsequently received letters

from Moss Codilis informing them of their default. In addition, The Money Store

allegedly charged plaintiffs improper fees on their accounts, including, inter alia:

fees for multiple property inspections that did not occur; vague and unwarranted

fees for “file reviews,” “senior lien monitoring,” and “Outsource Management

Fees”; excessive late fees; surcharges for breach letters; attorneys’ fees that were

never paid out to attorneys; costs for purported motions in the bankruptcy court

9
that were never filed; and fees for other bankruptcy services that were in excess

of what was contractually allowed.

B. The Breach Letter Program

By agreement dated April 17, 1997, The Money Store contracted with Moss

Codilis to prepare and mail breach notices to borrowers who, like plaintiffs, had

defaulted on their loans. Such notices inform homeowners that they are in

default and are generally a prerequisite before mortgage lenders like The Money

Store can foreclose on a borrower’s property. Labeled the “Breach Letter

Program,” Moss Codilis “generate[d] the thirty (30) day breach letters based on

information provided [by The Money Store] within [a] . . . spreadsheet.” J. App’x

336 (Letter of Agreement). In return, Moss Codilis received fifty dollars (later

thirty-five dollars) for each breach letter generated. Outside of the Breach Letter

Program, the firm performed no role in The Money Store’s collection of its debts.

Moss Codilis promoted the Program to lenders as a means of leveraging its

status as a law firm to encourage repayment of loans from borrowers in default.

The promotional materials state:

This program allows the client to send breach letters on attorney
letterhead at a reasonable cost. Most of these costs are recovered
through the reinstatement of the loans which is at a higher level as a

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 result of the impression which the attorney breach letter makes. . . .
It is . . . an excellent collection tool.

J. App’x 682. At least one executive at The Money Store confirmed at his

deposition that the purpose of the Breach Letter Program was “to hopefully gain

the attention of the borrower, since it was coming from the law firm[].” J. App’x

271-72 (deposition of John Dunnery, The Money Store Vice President).

The letters, which were printed on Moss Codilis letterhead, state that “this

law firm” has been “retained” in order to “collect a debt for our client,” and that

the “this firm has been authorized by [The Money Store] to contact you” and

“provide[] notice that you are in default” on the mortgage. J. App’x 652-56. The

letters further state that if the default is not resolved within 30 days, then

our client shall accelerate the entire sum of both principal and
interest immediately due and payable, and invoke any and all
remedies provided for in the Note and Security Instrument,
including but not limited to the foreclosure sale of the property.

J. App’x 652. Finally, the letters state that, with limited exceptions, “[a]ll

communication about this matter must be made through [The Money Store].”3 J.

3Specifically, the breach letters explain that the debtors could contact Moss
Codilis to: (1) dispute the debt in writing, at which point Moss Codilis
represented that it would obtain verification of the debt and mail it to the debtor;
(2) request the contact information for the original creditor; or (3) request in
writing that Moss Codilis refrain from contacting the debtor.
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App’x 656. From 1997 up through 2002, Moss Codilis sent 88,937 letters on The

Money Store’s behalf, and thus received approximately between $3 and $4.5

million in fees.

Moss Codilis’s work for The Money Store was supervised by Christina

Nash and, after July 1999, Valerie Bromley, who assisted Ms. Nash in sending

breach letters on The Money Store’s behalf. According to Moss Codilis, one of its

partners, Leo Stawiarski, bore primary responsibility for the legal aspects of the

firm’s work for The Money Store, and supervised Ms. Nash in all aspects, legal

and non-legal, of her work. The breach letters were “jointly drafted” by Nash

and The Money Store’s legal department.

The parties disagree markedly as to the nature of the tasks that Moss

Codilis performed for The Money Store. Each marshals evidence supporting its

respective position. Although characterizing itself as a law firm, Moss Codilis

describes the Breach Letter Program as an “exercise in mass processing” that

involved little to no legal or otherwise independent judgment. In particular,

Moss Codilis represented to the district court that “the only element of the Breach

Letter Program that required legal analysis was the drafting of language for the

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breach letter templates to ensure that they were in compliance with applicable

state and federal laws.” Vincent v. Money Store (Vincent II), No. 03 Civ. 2876

(JGK), 2011 WL 4501325, at *3 (S.D.N.Y. Sept. 29, 2011) (summarizing Moss

Codilis’s position).

For their part, plaintiffs assert that “Moss Codilis[’s] role in the default

process . . . began and ended with the mass generation of the breach letters.”

Appellants’ Br. 12. Plaintiffs further note:

Apart from the breach letters themselves, Moss Codilis had no
authority to initiate contact with debtors, no right to negotiate
payment plans, no right to settle for any amount other than what
Money Store said was in default, and no right to bring any legal
action. If the breach letters sent out by Moss Codilis failed to elicit
payment, it was Money Store — not Moss Codilis — who would
then determine whether the matter should be referred out to their
network of foreclosure counsel . . . .

Id. (citations and internal quotation marks omitted). Moreover, plaintiffs point to

Nash’s deposition testimony where she stated that if a debtor contacted her with

regard to “a legal matter,” she “escalated” it by referring the matter to The

Money Store instead of handling it herself.

In contrast to the foregoing, The Money Store contends that Moss Codilis

did more than simply print and mail letters. In addition to Moss Codilis’s role in

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reviewing the breach letters for their compliance with the FDCPA, The Money

Store notes that Nash testified at her deposition that she was the primary drafter

of the breach letters, with attorneys for The Money Store limited to “review[ing]

[the letters] for format.” Further, The Money Store points to Nash’s deposition

testimony that Moss Codilis conducted an independent review of the data on

delinquent borrowers sent to it by The Money Store, and that “if there was

questionable data, those loans were pulled and sent back to The Money Store.” J.

App’x 80–81 (testifying that questionable data includes things like “incomplete

borrower information or incomplete address information,” as well as data

suggesting that the borrower was not actually in default on his or her loan

obligations). Stressing Moss Codilis’s independence, The Money Store asserts

that when Moss Codilis disagreed with The Money Store’s request to send a

breach letter, Moss Codilis did not send out the letter.

The Money Store also notes that the breach letters invited debtors to

contact Moss Codilis if they wished to verify the debt or the identity of their

creditors. Pursuant to that invitation, Nash testified that she directly

corresponded with The Money Store’s debtors and their attorneys around one

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hundred times. Nash testified that on occasion she corresponded with a debtor’s

bankruptcy counsel and attorneys at The Money Store with regard to a debtor’s

bankruptcy proceedings, as well as whether the debts in question had been

discharged in bankruptcy. When legal action against a debtor was necessary,

The Money Store claims that lawyers “affiliated with” Moss Codilis handled the

legal proceedings through their own practices.

II. Procedural History

On April 24, 2003, plaintiffs filed the instant action in the district court

alleging that The Money Store had violated provisions of the FDCPA and TILA.

Plaintiffs argued that the breach letters were unlawful under the FDCPA because

they “creat[ed] the false impression that a third party had been hired to collect

the debt” and “falsely impl[ied] that a law firm had been retained by the Money

Store to collect the debt and was authorized to commence legal action against the

borrower.” With respect to their TILA claims, plaintiffs claimed that The Money

Store had charged their accounts for fees and expenses which it had no right to

collect, and had failed to refund the overcharges as required by TILA. Neither

the FDCPA claims nor the TILA claims were asserted against Moss Codilis.

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Separately, plaintiffs brought a number of claims against The Money Store and

Moss Codilis under Colorado and California state law.

By Order dated December 7, 2005, the district court (Sprizzo, J.) granted

summary judgment to The Money Store plaintiffs’ FDCPA claims, relying on its

prior decision in the separate, related case of Mazzei v. Money Store, 349 F. Supp.

2d 651, 661 (S.D.N.Y. 2004). Vincent v. Money Store (“Vincent I”), 402 F. Supp. 2d

501, 502–03 (S.D.N.Y. 2005).4 In Mazzei, the district court found that plaintiffs

could not rely on the false name exception because The Money Store had not

“used” Moss Codilis’s name. The district court reached this conclusion on the

grounds that Moss Codilis, not The Money Store, sent out the breach letters, that

The Money Store did not pretend to be Moss Codilis, and that The Money Store

did not so thoroughly control Moss Codilis as to render Moss Codilis its “alter

ego.” Mazzei, 349 F. Supp. 2d at 661 (citing Maguire v. Citicorp Retail Servs., 147

F.3d 232, 234–36 (2d Cir. 1998)). Accordingly, the district court concluded that

The Money Store was not subject to FDCPA liability pursuant to the false name

4Based on the submission by both parties of discovery materials from the Mazzei
case, the district court converted defendants’ motion to dismiss into a motion for
summary judgment. See Fed. R. Civ. P. 12(d); Chambers v. Time Warner, Inc., 282
F.3d 147, 152–54 (2d Cir. 2002).

16
exception. Id. The court declined to dismiss plaintiffs’ TILA claims, however,

concluding that plaintiffs had adequately alleged that The Money Store had

violated TILA by charging unauthorized fees and expenses and failing to refund

the resulting credit balances on their accounts. Id. at 662–63.

Following Judge Sprizzo’s death this case was reassigned to Judge Koeltl

on January 9, 2009. The Money Store subsequently moved for summary

judgment on plaintiffs’ TILA claims, arguing that it was not a “creditor” as

defined by the statute. By Order dated September 29, 2011, the district court

agreed and dismissed the TILA claims. Noting that TILA defines a “creditor” as

“the person to whom a debt is initially payable on the face of the indebtedness,”

15 U.S.C. § 1602(g), the district court found that The Money Store did not fit

within this definition because “[e]ach of the Notes identifies an entity other than

The Money Store Defendants as the original lender and indicates an assignment

to The Money Store Defendants.” The court also declined to exercise

supplemental jurisdiction over plaintiffs’ remaining state law claims, and denied

plaintiffs’ motion for reconsideration of the Judge Sprizzo’s decision to grant

defendants summary judgment on plaintiffs’ FDCPA claims, concluding that the

17
subsequent declaration of Ms. Nash introduced by plaintiffs, where she

explained that both she and Moss Codilis had a limited role in the Breach Letter

Program, would not have altered Judge Sprizzo’s decision.

Plaintiffs timely appealed the dismissal of their TILA and FDCPA claims

against The Money Store.5

DISCUSSION

“We review a district court’s grant of summary judgment de novo,” Lombard

v. Booz-Allen & Hamilton, Inc., 280 F.3d 209, 214 (2d Cir. 2002), and apply “the

same standards applied by the district court,” Tepperwien v. Entergy Nuclear

Operations, Inc., 663 F.3d 556, 567 (2d Cir. 2011). “Summary judgment may be

granted only if ‘there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P.

56(a)). In determining whether there is a genuine dispute as to a material fact, we

resolve all ambiguities and draw all inferences in favor of the non-moving party.

Donnelly v. Greenburgh Cent. Sch. Dist. No. 7, 691 F.3d 134, 141 (2d Cir. 2012).

5Although plaintiffs initially appealed the dismissal of their state law claims
against Moss Codilis, plaintiffs have since abandoned those claims, as plaintiffs’
counsel represented at oral argument that Moss Codilis has dissolved and is no
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I. FDCPA Liability

We start with plaintiffs’ FDCPA claims against The Money Store.

Congress enacted the FDCPA “to eliminate abusive debt collection practices by

debt collectors, to insure that those debt collectors who refrain from using

abusive debt collection practices are not competitively disadvantaged, and to

promote consistent State action to protect consumers against debt collection

abuses.” 15 U.S.C. § 1692(e). To further these ends, the FDCPA “establishes

certain rights for consumers whose debts are placed in the hands of professional

debt collectors for collection.” DeSantis v. Computer Credit, Inc., 269 F.3d 159, 161

(2d Cir. 2001). As is relevant here, section 1692e of the FDCPA provides

generally that “[a] debt collector may not use any false, deceptive, or misleading

representation or means in connection with the collection of any debt.” 15 U.S.C.

§ 1692e. In addition, “[w]ithout limiting the general application of the

foregoing,” section 1692e proscribes sixteen specific debt collection practices,

including “[t]he false representation or implication that any individual is an

attorney or that any communication is from an attorney.” Id. § 1692e(3).

longer doing business, rendering the prosecution of any such claims pointless.
Oral Arg. Tr. at 19.

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 Under our prior precedent, the plaintiffs have a triable claim that Moss

Codilis’s breach letters violated section 1692e’s prohibition on the “use of false,

deceptive, or misleading representation[s] . . . in connection with the collection of

any debt.” See Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993).6 Nonetheless,

6In determining whether language in a collection letter is “false, misleading, or
deceptive” under section 1692e, we have held that courts must look to whether a
reasonable “least sophisticated consumer” would be misled by it. Clomon, 988
F.2d at 1318. Here, the collection notices sent to plaintiffs are alleged to be
deceptive because they falsely represented that an attorney, Moss Codilis, had
been retained to collect The Money Store’s debts. See id. at 1320. The facts here,
construed in the light most favorable to plaintiffs, are nearly identical to Clomon.
See id. at 1321 (“[T]here will be few, if any, cases in which a mass-produced
collection letter bearing the facsimile of an attorney’s signature will comply with
the restrictions imposed by § 1692e.”); see also Miller v. Wolpoff & Abramson, L.L.P.,
321 F.3d 292, 300–07 (2d Cir. 2003) (interpreting Clomon as requiring “meaningful
attorney involvement” to avoid violating section 1692e, which is not satisfied
where attorney is merely told by client that debt is owed).

In addition, although not asserted by plaintiffs, there would have likewise
been a triable claim as to whether Moss Codilis violated 15 U.S.C. § 1692j, which
prohibits:

[T]he practice commonly known as “flat-rating,” in which an
individual sends a delinquency letter to the debtor portraying
himself as a debt collector, when in fact he has no real involvement
in the debt collection effort; in effect, the individual is lending his
name to the creditor for its intimidation value, often in exchange for
a “flat” rate per letter.

Nielsen v. Dickerson, 307 F.3d 623, 639 (7th Cir. 2002).

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we must decide whether the plaintiffs may press this claim against The Money

Store. They may do so only if The Money Store, “in the process of collecting [its]

own debts,” has “use[d] any name other than [its] own[, thereby] indicat[ing]

that a third person is collecting or attempting to collect such debts.” 15 U.S.C. §

1692a(6). This provision of the statute is a departure from the general rule that

creditors are not subject to the FDCPA. Maguire v. Citicorp Retail Servs., 147 F.3d

232, 235 (2d Cir. 1998); see also Mazzei, 349 F. Supp. 2d at 658 (“Such a rule makes

sense given that creditors already have a strong incentive to refrain from

badgering their customers about overdue debts.” (citing S. Rep. No. 95-382, at 2

(1977)). Thus, we must decide whether The Money Store “used” Moss Codilis’s

name in order to suggest that Moss Codilis, rather than The Money Store, was

“collecting” the relevant debts. We conclude that, resolving all factual disputes

in plaintiffs’ favor, it did.

We have previously addressed the scope of the FDCPA’s so-called false

name exception only once before, in Maguire v. Citicorp Retail Services. In Maguire,

the creditor, Citicorp, used the name “Debtor Assistance” in its collection letters,

which was the name of its in-house collection unit. 147 F.3d at 236. We held that,

21
in determining whether this constituted the use of a “false” name, a court must

apply an objective standard of whether the “least sophisticated consumer would

have the false impression that a third party was collecting the debt.” Id. (citing

Clomon, 988 F.2d at 1318).

We found that the letterhead in Maguire created the impression that a third

party called “Debtor Assistance” was collecting Citicorp’s debt, and that the

evidence in the record was unclear as to whether the plaintiff would have known

that Debtor Assistance was affiliated with Citicorp. We therefore held that the

letters were potentially misleading enough to trigger the application of the false

name exception. Accordingly, we reversed the district court’s grant of summary

judgment, and remanded for further proceedings. See id. at 236–38. Maguire did

not, however, address the situation we are confronted with here: whether the

false name exception can be invoked when the creditor uses the name of an

actual, non-affiliated third-party to collect its debts.

To resolve this question of statutory interpretation, we begin with the

statutory text. See Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 175 (2009) (“Statutory

construction must begin with the language employed by Congress and the

22
assumption that the ordinary meaning of that language accurately expresses the

legislative purpose.” (internal quotation marks omitted)). Because the FDCPA is

“remedial in nature, its terms must be construed in liberal fashion if the

underlying Congressional purpose is to be effectuated.” N.C. Freed Co. v. Bd. of

Governors of Fed. Reserve Sys., 473 F.2d 1210, 1214 (2d Cir. 1973); accord Johnson v.

Riddle, 305 F.3d 1107, 1117 (10th Cir. 2002) (collecting cases); see also Pipiles v.

Credit Bureau of Lockport, Inc., 886 F.2d 22, 27 (2d Cir. 1989) (“Congress painted

with a broad brush in the FDCPA to protect consumers from abusive and

deceptive debt collection practices.”). Section 1692a(6) of the FDCPA provides, in

relevant part, that any creditor, “who, in the process of collecting his own debts,

uses any name other than his own which would indicate that a third person is

collecting or attempting to collect such debts,” will be deemed a “debt collector”

and subject to liability under the FDCPA. 15 U.S.C. § 1692a(6). The text of the

exception thus sets forth three elements that must be satisfied before deeming a

creditor a debt collector pursuant to the false name exception: (1) the creditor is

collecting its own debts; (2) the creditor “uses” a name other than its own; and (3)

the creditor’s use of that name falsely indicates that a third person is “collecting

23
or attempting the collect” the debts that the creditor is collecting. The first

element, that the creditor is collecting its own debts, is undisputedly satisfied

here.

Turning to the latter two elements, in Maguire we described three ways

that these elements could be satisfied: (1) the creditor uses a name that falsely

implies that a third party is involved in collecting its debts; (2) the creditor

pretends to be someone else; or (3) the creditor uses a pseudonym or alias.

Maguire, 147 F.3d at 235. By separating the situation where a creditor falsely

implies the involvement of a third party from the situation where a creditor uses

a pseudonym, Maguire makes clear that the mere fact that the third-party whose

name is used by the creditor is a real entity not affiliated with the creditor is not

dispositive. See White v. Goodman, 200 F.3d 1016, 1018 (7th Cir. 2000)

(“Conceivably [the false name exception] could be read so narrowly as to reach

only the case in which the creditor is using a pseudonym; but this reading, as the

cases interpreting section 1692a(6) make clear, is too narrow. . . . [T]he statute

distinguishes between the use of pseudonyms . . . and a false representation that

a third party (which may exist) is participating in debt collection . . . .” (citations

24
omitted)). When presented with the allegation that a creditor has falsely implied

that a third party is collecting the creditor’s debts, we must examine both the

actions of the creditor, i.e., whether the creditor has “used” a name, and the role

of the third party, i.e., whether the third party is “collecting or attempt to collect”

the creditor’s debts.

Because neither “use” nor “collect” is defined in the statute, see 15 U.S.C.

§ 1692a, we give these terms their ordinary meaning. Taniguchi v. Kan Pac.

Saipan, Ltd., 132 S. Ct. 1997, 2002 (2012). Starting with “use,” dictionaries define

“use” as, inter alia, “To make use of (some immaterial thing) as a means or

instrument; to employ for a certain end or purpose.” 2 The Compact Edition of

the Oxford English Dictionary 3574 (1971); see also The American Heritage

Dictionary of the English Language New College Edition 1410 (1976) (“To . . .

employ for some purpose”); Webster’s Third New International Dictionary 2524

(1976) (“[T]o carry out a purpose or action by means of”).7 By requiring the

7We are aware that Webster’s Third New International Dictionary has not
garnered the greatest respect from a majority of the Justices of the Supreme
Court, see e.g., Taniguchi, 132 S. Ct. at 2003; MCI Telecomm. Corp. v. AT&T Co., 512
U.S. 218, 228 n.3 (1994), but cite it as a dictionary that employs a definition in
agreement with other dictionaries contemporaneous to the enactment of the
FDCPA.

25
creditor to “use” or “employ for some purpose” a name other than its own, the

text of the statute is clear that there must be some active involvement in the

misrepresentation by the creditor before triggering liability under the false name

exception. The exception does not create backdoor vicarious liability for

creditors simply because the collection agencies they hire to collect their debts

engage in deceptive practices. Williams v. Citibank, N.A., 565 F. Supp. 2d 523, 529

(S.D.N.Y. 2008).8

Here, the relevant affirmative action by The Money Store was retaining

Moss Codilis for the express purpose of sending breach letters that appeared to

be attorney collection letters to its debtors. Although we did not address what

constitutes sufficient affirmative action by the creditor in Maguire, an analogous

case from the Seventh Circuit, Boyd v. Wexler, makes clear why the alleged

misrepresentation of Moss Codilis’s role here can be attributed to The Money

Store’s “use” of Moss Codilis’s name in the breach letters. 275 F.3d 642 (7th Cir.

8The dissent argues that our holding today “will prove vexing” over time
because a creditor could hypothetically be held liable under the FDCPA “merely
for hiring a debt collector whose practices are deemed inadequate in some
respect.” Dissent at 19. This fear is unwarranted. It ignores entirely our
discussion of what the false name exception’s “use” element requires. We repeat,
26
2001). In Boyd, the Seventh Circuit addressed the issue of a collection agency’s

liability for paying a lawyer to use his letterhead on its collection letters. The

Court of Appeals explained that such a practice violates section 1692e because

“the lawyer is allowing the collection agency to impersonate him. The significance

of such impersonation is that a debtor who receives a . . . letter signed by a lawyer

will think that a lawyer reviewed the claim and determined that it has at least

colorable merit.” Id. at 644 (emphasis added). Although Boyd addressed section

1692e liability as against a debt collector, we see no reason why this

“impersonation” would not apply equally to a creditor’s “use” of a name under

section 1692a(6)’s false name exception. See Taylor v. Perrin, Landry, deLauney &

Durand, 103 F.3d 1232, 1235 (5th Cir. 1997) (holding that creditor may be held

liable under false name exception for sending a form “attorney demand letter”

that had been pre-prepared “by [an attorney] for [the creditor] to use in collecting

or attempting to collect from the debtor” and which “bore the letterhead of the

[attorney’s] law firm and the facsimile of [the attorney’s] signature”). When a

creditor that is collecting its own debts hires a third party for the purpose of

for emphasis: the exception does not create backdoor vicarious liability for
creditors.

27
sending letters that represent that the third party is collecting the debts, that is

sufficient to show the “use” of a name by the creditor other than its own. See also

White, 200 F.3d at 1018 (describing the creditor as the “primary violator” in a flat-

rating case).

The “use” element focuses on whether the creditor has actively engaged in

misrepresenting its identity in some way; by contrast, the “collecting or

attempting to collect” element focuses on whether the third party’s role is in fact

being misrepresented. See id. (noting that if a “third party is participating in the

debt collection, . . . there is no deception”). Even if The Money Store “use[d]”

Moss Codilis’s name in collecting its own debts, the false name exception does

not apply if in fact Moss Codilis was collecting or attempting to collect The

Money Store’s debts such that there was no misrepresentation to the consumer.9

9In finding the false name exception inapplicable here, the district court relied in
part on our statement in Maguire that “[t]he triggering of the FDCPA does not
depend on whether a third party is in fact involved in the collection of a debt, but
rather whether a least sophisticated consumer would have the false impression
that a third party was collecting the debt.” Mazzei, 349 F. Supp. 2d at 659–60
(quoting Maguire, 147 F.3d at 236). This language, however, does not mean that a
court should ignore the factual question of whether a third-party who exists is
collecting or attempting to collect a creditor’s debts. Rather, this portion of
Maguire was intended to rebut the argument that because the creditor, Citigroup,
and its misleadingly titled “third-party,” Debtor Assistance, were in fact
28
Id.; cf. Greco v. Trauner, Cohen & Thomas L.L.P., 412 F.3d 360, 364-65 (2d Cir. 2005)

(holding no misrepresentation, and thus no 1692e liability against the debt

collector law firm, where the law firm retained by the creditor clearly disclosed in

the letter that the law firm was not acting as an attorney).

The plain meaning of “collect” in the context of debts is “[t]o gather

(contributions of money, or money due, as taxes, etc.) from a number of people.”

1 The Compact Edition of the Oxford English Dictionary 465; see also The

American Heritage Dictionary of the English Language New College Edition 261

(“To call for and obtain payment of”); Webster’s Third International Dictionary

444 (“[T]o receive, gather, or exact from a number of persons or other sources”).

This definition, while useful to the inquiry, is ultimately ambiguous as applied to

the facts of any particular case. It does not define how involved a debt collector

must be before we can fairly say it is gathering money on behalf of the creditor.10

affiliated, the creditor had not “use[d] a[] name other than its own.” Maguire, 147
F.3d at 236. The focus of the false name exception, in any case, is on whether the
creditor has used a name to disguise to the consumer who is actually collecting
the debt. See id.
10Where the text of the statute is ambiguous, we frequently resort to legislative
history to assist us in interpreting the provision. See United States v. Dauray, 215
F.3d 257, 265 (2d Cir. 2000). But the legislative history of the FDCPA is unhelpful
here. None of the relevant congressional reports or hearings addressed the
29
The Money Store argues that Moss Codilis was involved in the debt collection

process by generating the breach letters and sending them to the debtors. Moss

Codilis, however, described its Breach Letter Program as an exercise in “mass

processing.” According to plaintiffs and Moss Codilis, other than printing and

mailing the letters and dealing with some follow-up limited to directing

substantive phone calls from debtors to The Money Store, all meaningful

collection efforts or attempts to “gather” the money owed were handled by The

Money Store.

We reject The Money Store’s contention that by generating and mailing the

breach letters alone, Moss Codilis was “collecting or attempting to collect” The

Money Store’s debts. Under our holding in Maguire, if The Money Store had

applicability or scope of the false name exception. See generally S. Rep. No. 95-382
(1977); H.R. Rep. No. 95-131 (1977); H.R. Rep. No. 94-1202 (1976); Fair Debt
Collection Practices Act: Hearings on S. 656, 918, 1130 and H.R. 5294 Before the
Subcomm. on Consumer Affairs of the S. Comm. on Banking, Housing and Urban
Affairs, 95th Cong. (1977); Debt Collection Practices Act: Hearings on H.R. 29 Before
the Subcomm. on Consumer Affairs of the H. Comm. on Banking, Currency, and Urban
Affairs, 95th Cong. (1977); Consumer Information: Hearings Before the Subcomm. on
Consumer Affairs of the H. Comm. on Banking, Finance, and Urban Affairs, 95th Cong.
(1977); Debt Collection Practices Act: Hearings on H.R. 11969 Before the Subcomm. on
Consumer Affairs of the H. Comm. on Banking, Currency, and Housing, 94th Cong.
(1976); Oversight on Consumer Protection Activities of Federal Banking Agencies:
30
simply purchased letterhead from Moss Codilis and sent out the debt collection

letters on Moss Codilis letterhead, The Money Store would be liable. See Maguire,

147 F.3d at 235; Taylor, 103 F.3d at 1236, 1239; see also Sokoloski v. Trans Union

Corp., 53 F. Supp. 2d 307, 312 (E.D.N.Y. 1999) (“[A] creditor participating in [a]

flat-rating arrangement can be liable under the [false name exception].”). And if

instead The Money Store had provided the precise text of the letters to Moss

Codilis, which then printed them on Moss Codilis letterhead and mailed them,11

it would be a hyper-technical distinction to conclude that Moss Codilis was

“collecting or attempting to collect” The Money Store’s debts by physically

printing and mailing the letters. Thus, “collecting” debts must mean something

more than any role, no matter how tangential, in the collection process. Merely

changing the return address from The Money Store to Moss Codilis does not alter

the force of Maguire because it does not change whether the letter misleads

consumers, which we have explained is the statutory touchstone for all aspects of

the FDCPA, including the false name exception. Maguire, 147 F.3d at 236; see also

Hearings Before the S. Comm. on Banking, Housing and Urban Affairs, 94th Cong.
(1976).
11Or alternatively, The Money Store sent the letters in sealed, stamped envelopes
to Moss Codilis with the note “please mail.”
31
Clomon, 988 F.2d at 1318. Accordingly, the fact that Moss Codilis sent deceptive

letters in and of itself is not conclusive evidence of Moss Codilis collecting or

attempting to collect The Money Store’s debts.

Our rejection of this argument is supported by the Federal Trade

Commission’s interpretative guidance on section 1692e(14), which prohibits a

debt collector from “us[ing] . . . any business, company, or organization name

other than the (collector’s) true name.” See FTC, Statements of General Policy or

Interpretation Staff Commentary on the Fair Debt Collection Practices Act, 53

Fed. Reg. 50,097, 50,107 (Dec. 13, 1988).12 Addressing the scope of the section as

applied to creditors, the FTC has suggested:

A creditor violates this section if he uses the name of a collection
bureau as a conduit for a collection process that the creditor controls
in collecting his own accounts. . . . A creditor does not violate this
provision where an affiliated (and differently named) debt collector
undertakes collection activity, if the debt collector does business
separately from the creditor (e.g., where the debt collector in fact has
other clients that he treats similarly to the creditor, has his own

12 Although the FTC Staff Commentary is likely not entitled to Chevron deference,
we look to the FTC’s informal opinions as persuasive authority. See Gulley v.
Markoff & Krasny, 664 F.3d 1073, 1074–75 (7th Cir. 2011) (holding that because
Commentary “is based primarily on issues discussed in informal staff letters,” it
is not entitled to Chevron deference pursuant to United States v. Mead Corp., 533
U.S. 217, 234 (2001), and receives only “respectful consideration” (internal
quotation marks omitted)).

32
 employees, deals at arms length with the creditor, and controls the
process himself).

Id. (emphasis added).13 The FTC Staff Commentary distinguishes between a

third-party acting as a mere “conduit for a collection process that the creditor

controls” from “undertak[ing] collection activity . . . separate[] from the creditor.”

Id.14

13The dissent finds this guidance unhelpful because it addresses section
1692e(14) and does not explicitly cite section 1692a(6)’s false name exception.
Dissent at 16 n.6. We think this is a cramped interpretation of FTC’s guidance.
The guidance addresses how section 1692e(14) applies to creditors, and, in our
view, thus implicitly relies on section 1692a(6)’s false name exception to explain
how a creditor can be held liable as a debt collector for violating section
1692e(14).
14 The district court here appeared to apply a more stringent version of the test
outlined by the FTC. Specifically, in Mazzei, the district court concluded, inter
alia, that The Money Store did not “own[] and control[] the debt collector,
rendering it the creditor’s alter ego.” See Mazzei, 349 F. Supp. 2d at 659–61. The
question, however, is not whether the debt collector is the creditor’s alter ego, but
whether the creditor controlled “a collection process” that it used to collect its own
debts. 53 Fed. Reg. at 50,107 (emphasis added); see also 15 U.S.C. § 1692a(6)
(exception applies to a creditor “who, in the process of collecting [its] own debts,”
uses a false name (emphasis added)).

33
 The Seventh Circuit’s approach to creditor liability lends further support to

this “conduit” test.15 In Nielsen v. Dickerson, the Seventh Circuit held that

creditors who retain an attorney to mass mail debt collection letters are “debt

collectors” under the FDCPA’s false name exception if the attorney has “neither

made a considered, professional judgment that [the debtor] was delinquent on

her debt and a candidate for legal action nor meaningfully involved himself in

the decision to send the [collection] letter to any individual debtor.” Nielsen v.

Dickerson, 307 F.3d 623, 635 (7th Cir. 2002) (internal quotation marks omitted).

The Seventh Circuit in Nielsen relied on several factors to determine that “the true

source” of the letter was the creditor, not the attorney. Id. at 639.

First, the Court of Appeals noted that the attorney’s review of the debtor

information provided by the creditor was “ministerial” in nature, and “did not

call for the exercise of professional judgment.” Id. at 636. In particular, the court

noted that the attorney who signed the letters:

did not make the decision to send a letter to a debtor; [the creditor]
did. . . . To the extent [the attorney] eliminated some names from the
list of delinquent debtors that [the creditor] provided (based on

15So far as we can tell, aside from Maguire, Taylor, and the Seventh Circuit case
law discussed here, no other federal court of appeals has addressed the scope of
the false name exception in a precedential opinion.

34
 anything more than obvious gaps or errors in [the creditor’s]
information), the record suggests that he did so based solely on the
discovery that the debtor had declared bankruptcy, had already
been sent a letter, or lived in one of three states which would not
permit a letter of the kind that Dickerson had prepared. . . . [T]his
was purely a categorical assessment rather than one calling for an
individualized, discretionary assessment . . . .

Id. at 635-36. The court also noted that: (1) the attorney did not have access to

debtors’ files, but rather was simply given basic information on debtors by the

creditor, id. at 636; (2) the collection letter sent to debtors “was a form letter that

the firm . . . prepared and issued en masse” in an “assembly line fashion,” id. at

637 (noting that the creditor referred around 2,000 accounts to the attorney each

month); (3) the attorney “played barely more than a ministerial role in handling

the responses to the letter” from debtors, id.; (4) the creditor paid the attorney “a

flat fee” for each letter sent “regardless of the result (if any) that the letter

produced,” id.; and (5) the attorney “never took legal action in pursuit of [the

creditor’s] debts,” id.

Similarly, in White v. Goodman, the plaintiffs sued the debt collection

agency as a “flat-rater” under section 1692j who was not attempting to actually

collect the debts owed, and sued the creditor under the false name exception.

35
White, 200 F.3d at 1019. The Seventh Circuit noted in dicta that “if [North Shore,

the debt collection agency,] were a flat-rater, Book-of-the-Month Club [the

creditor] might be liable under section 1692a(6).” Id. However, the Seventh

Circuit determined that North Shore was not a flat-rater because it did more than

simply process and mail letters to debtors. If the debtors failed to pay after

receiving the letters, the Book-of-the-Month Club would turn the debts over to

North Shore to determine what efforts to undertake to collect the debts. Id.

North Shore was then entitled to keep 35% of any amount it collected. Id.

Because North Shore was a “bona fide collection agency,” it could not be liable as

a flat-rater, and Book-of-the-Month Club could not be liable under the false name

exception. Id.16

16The dissent suggests that we are creating an “odd liability gap” where a party
in Moss Codilis’s shoes could be “too involved in collection to be flat-raters
under § 1692j, but not involved enough to be ‘actually’ collecting or attempting to
collect any debts . . . under § 1692a(6).” Dissent at 18. The only way out of this
gap, according to the dissent, is if we intend that the bona fide standard is simply
the inverse of § 1692j’s flat-rating standard. We mean precisely that, as did the
Seventh Circuit in White when it explained that “if [the debt collection agency]
were a flat-rater, [the creditor] might be liable under section 1692a(6).” White, 200
F.3d at 1019.

The dissent characterizes this as an “implausible construction of § 1692j,”
Dissent at 18, but we disagree. Although the dissent relies on the word
36
 We therefore hold that, when determining whether a representation to a

debtor indicates that a third party is collecting or attempting to collect a creditor’s

debts, the appropriate inquiry is whether the third party is making bona fide

attempts to collect the debts of the creditor or whether it is merely operating as a

“conduit” for a collection process that the creditor controls. Id.; 53 Fed. Reg. at

50,107. This is a question of fact. In this case, at the summary judgment stage,

we cannot find as a matter of law that Moss Codilis was engaged in such bona fide

efforts. Moss Codilis described its Breach Letter Program as an “exercise in mass

processing.” Resolving the disputed issues of fact in favor of plaintiffs, the sole

function of the Program appears to have been to allow creditors to falsely

represent to debtors that debt collection letters were “from” a law firm that had

been retained to collect the delinquent debt.

Viewed in this light, the jury could conclude that the letters received by

plaintiffs appear to be “from” The Money Store in every meaningful sense of the

“furnishes” in section 1692j to mean that a debt collection agency that “sends” the
forms to the debtor cannot be held liable as a flat-rater, we are not persuaded that
such a narrow reading is correct. See, e.g., Nielsen, 307 F.3d at 639 (“[Section
1692j(a)] bars the practice commonly known as ‘flat-rating,’ in which an
individual sends a delinquency letter to the debtor portraying himself as a debt
37
word. The Money Store reviewed and maintained possession over its debtors’

files. According to Nash, Moss Codilis merely received spreadsheets from The

Money Store containing the information of debtors who The Money Store had

determined were delinquent, added the debtor’s information onto a form letter

with Moss Codilis letterhead, and mailed the letters. While Nash performed

minimal reviews of the debtor information provided to her and could request

loan documents for a “questionable account,” her statements suggest that this

review was limited to purely ministerial tasks like ensuring that The Money Store

had provided her with complete address information. Indeed, Nash indicated

that The Money Store typically sent Moss Codilis batches of borrower

information that “usually exceeded 1000 borrowers,” and required Moss Codilis

to mail all the Breach Letters by the next day.

Notwithstanding its limited involvement, Moss Codilis sent out letters to

plaintiffs stating that “this law firm” has been “retained” in order to “collect a

debt for our client.” The jury could find that this falsely implied that Moss

Codilis was attempting to collect The Money Store’s debts and would institute

collector, when in fact he has no real involvement in the debt collection effort
. . . .” (emphasis added)). Regardless, this issue is not before us.

38
legal action against debtors on behalf of The Money Store if the debtors did not

resolve the delinquency. Thereafter, plaintiffs argue that Moss Codilis performed

virtually no role in the actual debt collection process—besides the essentially

ministerial tasks of verifying the debt with The Money Store, informing debtors

of the identity of their creditor, and verifying whether a debtor’s debts had been

discharged in bankruptcy.

Indeed, the facts here, taken in the light most favorable to plaintiffs, are

nearly identical to Nielsen, where the Seventh Circuit found:

Having reached [the] conclusion [that the attorney, Dickerson,
violated sections 1692e(3) & (10)], the actual source of the letter is
obvious. It was Household [the creditor] that selected the debtors to
whom Dickerson’s letter was to be sent. It was Household that
provided the information that Dickerson needed regarding the
identity of the debtor and the amount of his or her delinquency in
order complete the letter. It was Household on which Dickerson
relied for the determination that the debtor was indeed delinquent
and therefore an appropriate recipient of the letter. It was
Household that reserved the right to approve issuance of the letters.
It was ultimately Household that handled all responses to
Dickerson’s letter. And it was Household that decided what further
action (including legal action) would be taken in the wake of
Dickerson’s letter.

Nielsen, 307 F.3d at 639.

39
 We therefore conclude that a jury could find that Moss Codilis was not

collecting The Money Store’s debts and instead acted as a mere “conduit” for a

collection process that The Money Store controlled. 53 Fed. Reg. at 50,107. And if

the breach letters falsely indicated that Moss Codilis was “collecting or

attempting to collect” The Money Store’s debts, The Money Store can be held

liable under the FDCPA pursuant to the false name exception. 15 U.S.C.

§ 1692a(6).17 Accordingly, the district court erred in granting The Money Store

summary judgment on plaintiffs’ FDCPA claims, and we vacate its dismissal of

their claims and remand for further proceedings.18

17We do not reach plaintiffs’ argument that we should adopt the Seventh
Circuit’s approach to the false name exception for the specific situation where the
third party is held out by the creditor as an attorney. Under this approach, the
Seventh Circuit asks whether the third-party has exercised his independent
judgment as an attorney in reviewing each debtor’s individual case before
sending out a letter. See Nielsen, 307 F.3d at 634; see also Miller, 321 F.3d at 301
(requiring “some degree of attorney involvement” when debt collection letters
are sent by attorneys holding themselves out as retained attorneys to avoid
section 1692e liability).
18The dissent argues that we are conflating “the deception of a creditor who uses
a third party’s name with the deception of a third-party debt collector who
falsely claims to be acting as an attorney.” Dissent at 2-3. We are not. Quite the
contrary, it is the dissent that conflates section 1692a(6)’s false name exception,
which can be invoked where the creditor falsely “indicate[s] that a third person is
collecting or attempting to collect [its specific] debts,” with the general definition
of “debt collector,” which is defined as “any person who uses any
40
II. TILA Liability

We next turn to plaintiffs’ claims that The Money Store violated the Truth

in Lending Act. Plaintiffs contend that The Money Store violated section 1666d

of TILA by failing to refund credit balances owed to them on their accounts. See

15 U.S.C. § 1666d (“Whenever a credit balance in excess of $1 is created in

connection with a consumer credit transaction . . . the creditor shall . . . refund

any part of the amount of the remaining credit balance, upon request of the

consumer.”); see also 12 C.F.R. § 226.21 (implementing regulation). Specifically,

plaintiffs argue that The Money Store charged their accounts unauthorized fees

and expenses in excess of that permitted under state law, resulting in credit

balances that defendant failed to refund.

TILA seeks to “protect . . . consumer[s] against inaccurate and unfair credit

billing and credit card practices” and promote “the informed use of credit” by

“assur[ing] a meaningful disclosure” of credit terms. 15 U.S.C. § 1601(a). It

instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6) (emphasis added). Thus, a person can be a debt
collector by regularly collecting debts or being involved in a debt collection
41
imposes general liability only on creditors and greatly circumscribes the liability

of assignees. See 15 U.S.C. §§ 1640(a); 1641(e). TILA defines a “creditor” as a

person who both:

(1) regularly extends, whether in connection with loans, sales of
property or services, or otherwise, consumer credit which is payable
by agreement in more than four installments or for which the
payment of a finance charge is or may be required, and (2) is the
person to whom the debt arising from the consumer credit
transaction is initially payable on the face of the evidence of
indebtedness or, if there is no such evidence of indebtedness, by
agreement.

15 U.S.C. § 1602(g). This definition “is restrictive and precise, referring only to a

person who satisfies both requirements” of the provision. Cetto v. LaSalle Bank

Nat’l Ass’n, 518 F.3d 263, 270 (4th Cir. 2008).

In addition to this statutory definition of a “creditor,” the Federal Reserve

Board’s “Regulation Z” interprets the second prong of TILA’s definition of

creditor as applying to only “[a] person . . . to whom the obligation is initially

payable, either on the face of the note or contract, or by agreement when there is

no note or contract.” 12 C.F.R. § 226.2(a)(17)(i); cf. Gambardella v. G. Fox & Co., 716

F.2d 104, 106 (2d Cir. 1983) (describing Regulation Z as among the “regulations

business even though that person does not collect the debt at issue in a given
case.
42
promulgated by the [Federal Reserve Board]” to “implement[]” TILA). The

Supreme Court has indicated that Regulation Z is entitled to Chevron deference

where the Federal Reserve has reasonably interpreted an ambiguous term of

TILA. Household Credit Servs., Inc. v. Pfennig, 541 U.S. 232, 239–44 (2004)

(reversing court of appeals for failing to defer). The Federal Reserve Board’s

Official Staff Commentary to Regulation Z further provides that “[i]f an

obligation is initially payable to one person, that person is the creditor even if the

obligation by its terms is simultaneously assigned to another person.” 12 C.F.R.

pt. 226, supp. I at 300 (2000); see Riviere v. Banner Chevrolet, Inc., 184 F.3d 457, 461

(5th Cir. 1999) (holding that a car dealer to whom loan obligation was initially

payable was the sole creditor even though loan was immediately assigned to a

financing company); Mayfield v. Gen. Elec. Capital Corp., No. 97 Civ. 2786, 1999 WL

182586, at *3 (S.D.N.Y. Mar. 31, 1999) (interpreting the Official Staff Commentary

to Regulation Z to mean that the person to whom the debt is initially payable is

the only creditor “even when the contract provides for the immediate assignment

of the obligation”). “[T]he Official Staff Commentary promulgated by the

[Federal Reserve] Board as an interpretation of Regulation Z may warrant

43
deference as a general matter.” Chase Bank USA, N.A. v. McCoy, 131 S. Ct. 871,

882 (2011); accord Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 565 (1980)

(“Unless demonstrably irrational, Federal Reserve Board staff opinions

construing [TILA] or [Regulation Z] should be dispositive . . . .”).

We agree with the district court that The Money Store is not “the person to

whom the debt arising from the consumer credit transaction [was] initially

payable on the face of the evidence of indebtedness,” 15 U.S.C. § 1602(g), and is

therefore not a “creditor” under TILA with respect to the transactions at issue

here. Specifically, the district court correctly rejected plaintiffs’ central argument

that the loans in question were “initially payable” to The Money Store “because

the assignments to The Money Store Defendants occurred before the funds were

disbursed to [some of] the plaintiffs and before [those] plaintiffs made their first

loan payments.” Vincent v. Money Store, No. 03 Civ. 2876 (JGK), 2011 WL

4501325, at *4 (S.D.N.Y. Sept. 29, 2011). TILA establishes a straightforward,

objective inquiry for determining the identity of the creditor: it is “the person to

whom the debt arising from the consumer credit transaction is initially payable

on the face of the evidence of indebtedness.” 15 U.S.C. § 1602(g). Here, the initial

44
lenders on the loans were entities other than The Money Store. See, e.g., J. App’x

851 (Vincent Note stating that “In return for a loan that I have received, I promise

to pay U.S. $ 67,600 . . . to the order of the Lender. The Lender is ACCUBANK

MORTGAGE CORPORATION. I understand that the Lender may transfer this

Note.”).

While all the Notes were eventually assigned to The Money Store, the

Federal Reserve Board’s Official Staff Commentary to Regulation Z provides that

“[i]f an obligation is initially payable to one person, that person is the creditor,

even if the obligation by its terms is simultaneously assigned to another person.”

12 C.F.R. pt. 226, supp. I, at 300 (2000). The Notes in question here were not even

simultaneously assigned to The Money Store. Each of the assignments took place

by means of a separate endorsement, commenced after the Notes had been fully

executed.

Plaintiffs are correct that, at least with respect to the Gutierrez and Garrido

Notes, these assignments occurred before the first payment was due on the

loan—and so, in a literal sense, the “initial payment” was made to The Money

Store. This, however, is irrelevant under the Federal Reserve Board’s

45
Commentary to Regulation Z. Otherwise, the Commentary’s guidance that

simultaneous assignments do not alter the identity of the “creditor” under TILA

would make no sense; the assignee of a simultaneous assignment will

presumably always be the first “person” to whom an initial loan payment is

made. TILA does not define “creditor” as the person to whom the first loan

payment is made; rather, it asks to whom the loan is “initially payable on the face

of the evidence of indebtedness.” With respect to each of the plaintiffs’ loans,

that person is an entity other than The Money Store.

Although we conclude that the district court correctly determined that The

Money Store is not a “creditor” under TILA, we note that plaintiffs have

identified an apparent oversight in the statute. Specifically, the provision of

TILA plaintiffs claim The Money Store has violated, section 1666d, requires a

“creditor” to “credit the amount of [any] credit balance [over $1] to the

consumer’s account” and “refund any part of the amount of the remaining credit

balance, upon request of the consumer.” 15 U.S.C. § 1666d(A)-(B). We agree

with plaintiffs that restricting the application of section 1666d to the initial lender

does not make much sense. Unlike most of TILA’s provisions, which require

46
creditors to make certain disclosures to debtors at the time of a loan’s execution,

see, e.g., id. §§ 1604, 1631-51, section 1666d imposes obligations on creditors

throughout the life of the loan. Indeed, we can think of no reason why Congress

would require a credit balance in a consumer’s account be refunded only if the

balance was maintained by the original creditor and not a subsequent assignee.

Moreover, as plaintiffs note, given the widespread prevalence of mortgage loan

originators selling such loans for securitization, this definition renders section

1666d inapplicable to a substantial number of mortgage loans.

Legislative history suggests that this gap may be an unintended

consequence of congressional reform to TILA. See Union Carbide Corp. &

Subsidiaries v. Comm’r, 697 F.3d 104, 109 (2d Cir. 2012) (“Agencies are charged

with implementing legislation that is often unclear and the product of an often-

messy legislative process. Trying to make sense of the statute with the aid of

reliable legislative history is rational and prudent.” (internal quotation marks

omitted)). In 1980, Congress amended TILA to limit assignees’ exposure to

liability, allowing the imposition of liability on an assignee “only if the violation

for which such action or proceeding is brought is apparent on the face of the

47
disclosure statement.” Taylor v. Quality Hyundai, Inc., 150 F.3d 689, 692 (7th Cir.

1998) (quoting 15 U.S.C. § 1641(a)). “Prior to this amendment, the statutory

provisions that assured transfer of the forms containing the TILA disclosures to

the assignee also made it possible for the debtor to claim that the assignee had

‘knowledge’ of the violation.” Id. at 693. Accordingly, based on the

recommendation of the Federal Reserve Board, Congress “simplifie[d] the

definition of ‘creditor’ . . . [to] eliminate confusion under the current act as to the

responsibilities of assignees.” S. Rep. No. 96-368, at 24 (1979).

In its initial Report accompanying the amendments to TILA, the Senate

Banking, Housing, and Urban Affairs Committee explained as follows:

This [amendment] eliminates two uncertainties under present law as
to an assignee’s liability for an original creditor’s violation of the act.
Under present law, an assignee is generally liable only where a
violation is “apparent on the face” of the disclosure statement. What
types of violations are covered is unclear. This section provides that
violations are apparent on the face of a disclosure statement when
disclosures are inaccurate or incomplete based on the statement or
other documents involved, and where incorrect terminology is
utilized.

In addition, this section eliminates ambiguity on the question of
assignee liability for rescission by stating explicitly that a consumer’s
exercise of this right is effective against an assignee. Without such
protection for the consumer, the right of rescission would provide
little or no effective remedy.

48
S. Rep. No. 96-73, at 18 (1979).

During the hearings held on the precursor reform bill, the Truth In

Lending Simplification and Reform Act, the testimony related to the issue of

assignee liability focused almost exclusively on disclosure requirements. For

example, testifying in support of the amendment, the American Bankers

Association noted that decisions by federal courts of appeals had complicated

situations where multiple parties financed loans, and that limiting the definition

of creditor to the initial creditor “clarif[ies] that only one creditor must make

disclosures.” Truth in Lending Simplification and Reform Act: Hearing on S. 108 Before

the S. Comm. On Banking, Housing, and Urban Affairs, 95th Cong. 84–85 (1979)

(emphasis added) (statement of David S. Smith, on behalf of the Am. Bankers

Ass’n); see, e.g., Meyers v. Clearview Dodge Sales, Inc., 539 F.2d 511 (5th Cir. 1976)).

The Federal Reserve recommendation cited in the Senate Report accompanying

the final bill noted:

One issue that spawned extensive litigation is who must make the
disclosures if there is more than one creditor in the transaction. The
Board recommends that only one disclosure statement be required
and that the obligation to disclose be placed upon the creditor to
whom the obligation is made payable on its face. This provides a
simpl[e] mechanical rule for creditors to follow and should insure
that consumers get the required disclosures.

49
Id. at 96 (statement of Robert Evans, Nat’l Consumer Fin. Ass’n) (quoting

testimony of Federal Reserve Board Governor Jackson).

Based on the foregoing, it appears reasonable to conclude that when

Congress amended TILA, its primary concern was limiting assignee liability for

an initial creditor’s violations of TILA’s disclosure requirements. Indeed, in the

same breath, the Senate Banking Committee Report clarified that consumers

could continue to exercise their right to rescission against assignees, in the

absence of which the right “would provide little or no effective remedy.” S. Rep.

No. 96-73, at 18; see also 15 U.S.C. § 1635(a) (debtor has right to rescind any credit

transaction that creates a security interest in the debtor’s principal dwelling

within three business days); Consumer Information: Hearings Before the Subcomm. on

Consumer Affairs of the H. Comm. on Banking, Finance, and Urban Affairs, 95th Cong.

152–53 (1977) (statement of Christian S. White, Assistant Director for Special

Statutes, FTC) (requesting amendments to TILA to ensure rescission provisions

can be enforced against assignees). But by changing the definition of “creditor”

to exclude assignees without also creating an explicit carveout for a consumer’s

50
ongoing right to be refunded a credit balance, consumers cannot rely on TILA as

a remedy to force an assignee to refund a credit balance, as is the case here.19

We cannot say Congress was unaware of the consequences of changing the

definition of creditor as it debated the amendments to TILA. At the above-

referenced Senate hearing, the statement of Robert J. Hobbs, a staff attorney at

the National Consumer Law Center, explicitly addressed the issue we are faced

with here. Mr. Hobbs explained:

Section 21. Return of Customer Credit Balances. A series of FTC
actions against large creditors who were holding millions of dollars
of their customer’s unpaid refunds focused attention on the
problems addressed by section 21. This section adds to the present
law the responsibilities of paying such balances after six months and
of taking reasonable steps to trace the consumer’s present address if
it has changed. This section also expands these obligations to all
‘creditors’ although that term is considerably circumscribed by Section 2 of
§ 2802. The obligations of TILA § 165 should also run to assignees.

19Plaintiffs argue in the alternative that summary judgment was inappropriate
here because, for at least some of the loans, the initial creditor may have been a
broker, and therefore would not count as a creditor for TILA purposes. But the
district court noted that each of the plaintiffs received TILA disclosure statements
from lenders other than The Money Store, which are required to be made by the
“creditor,” 15 U.S.C. §§ 1631 & 1635, “evidenc[ing] the fact that the original
lenders, rather than The Money Store Defendants, were ‘creditors’ for purposes
of TILA.” Plaintiffs offer no arguments that show this conclusion was in error.

51
Truth in Lending Simplification and Reform Act: Hearing on S. 108 Before the S. Comm.

on Banking, Housing, and Urban Affairs, 96th Cong. 43–44 (1979) (emphasis added).

“It is well established that when the statute’s language is plain, the sole

function of the courts—at least where the disposition required by the text is not

absurd—is to enforce it according to its terms.” Lamie v. U.S. Trustee, 540 U.S.

526, 534 (2004) (internal quotation marks omitted). We may think it unwise to

allow an assignee to escape TILA liability when it overcharges the debtor and

collects unauthorized fees, where the original creditor would otherwise be

required to refund the debtor promptly. But such a result is not “absurd.” We

will not rewrite the text of the statute, nor will we refuse to defer to the Federal

Reserve’s consideration of the liability of assignees in Regulation Z. We note this

discrepancy, however, for the benefit of Congress and the Federal Reserve. See

generally Robert A. Katzmann, Statutes, 87 N.Y.U. L. REV. 637, 685–93 (2012)

(suggesting judiciary should inform Congress of its opinions interpreting federal

statutes). For the reasons stated above, The Money Store is not a “creditor”

under TILA and the district court correctly dismissed the plaintiffs’ TILA claims.

52
 CONCLUSION

Accordingly, the district court’s judgment is AFFIRMED in part,

VACATED in part, and REMANDED for further proceedings consistent with

this Opinion.

53
KATZMANN, Chief Judge, concurring:

Unsurprisingly, I concur in the Court’s judgment and agree with its

reasoning. I write separately to address the argument regarding the false name

exception to creditor liability under the FDCPA that the majority opinion

declined to address as unnecessary. See supra, at 40 n.17. Specifically, I agree

with the Seventh Circuit that where a creditor uses the name of a lawyer or law

firm to represent falsely that an attorney has been retained to collect the

creditor’s debt, the false name exception should apply if the lawyer

misrepresents his role as an attorney. See Nielsen v. Dickerson, 307 F.3d 623,

634–39 (7th Cir. 2002).

As the majority opinion notes, where the third party is held out by the

creditor as an attorney retained to collect the creditor’s debts, the Seventh Circuit

asks whether the third-party has exercised his independent judgment as an

attorney in reviewing each debtor’s individual case before sending out a letter.

See id. Our Circuit has applied an identical standard to whether an attorney

debt-collector has engaged in deceptive practices in violation of section 1692e to

the question of whether to pierce creditor immunity under section 1692a(6)’s

1
false name exception. Compare id., with Miller v. Wolpoff & Abramson, L.L.P., 321

F.3d 292, 301, 306–07 (2d Cir. 2003) (citing Nielsen with approval). Although the

majority opinion here does not reach the issue because there is a dispute as to

whether Moss Codilis acted as even an ordinary debt collector, I write to explain

why I think we should adopt Nielsen wholesale.

My reasoning is simple. We have previously held that the focus of the

false name exception—indeed, the focus of the entire FDCPA—is on what the

“least sophisticated consumer” believes to be true based on the representations

made in the debt collection letter. See Maguire v. Citicorp. Retail Servs., Inc., 147

F.3d 232, 236 (2d Cir. 1998); see also Greco v. Trauner, Cohen & Thomas, L.L.P., 412

F.3d 360, 363 (2d Cir. 2005). Where a debt collector holds himself out to the

consumer as an attorney retained to collect the debt, we have held that an

attorney must be meaningfully involved—i.e., exercise some degree of

professional judgment—so as not to misrepresent his role to the consumer.

Miller, 321 F.3d at 301, 306–07; Clomon v. Jackson, 988 F.2d 1314, 1321 (2d Cir.

1993). Therefore, it would be entirely consistent with the approach to FDCPA

liability we have followed thus far to hold that where the creditor uses the name

2
of an attorney to collect its debts, we should evaluate whether the use of that

name misleadingly indicates that the attorney acted in his professional capacity.

See Nielsen, 307 F.3d at 634. Nielsen accords with both the text of the statute and

our prior precedent.

One may object that such an approach may expose a creditor to liability

where the creditor hired a debt collector to collect its debts, but the debt collector

impersonated an attorney on his own accord. Not so. As the Court’s opinion

explains, a creditor must be “actively engaged in [the] misrepresent[ation]” to

“use” the name of another and be held liable under the false name exception.

Supra, at 28. If the creditor is not involved in misrepresenting the debt collector

as an attorney, then the false name exception does not apply. Accordingly, if

such a case presents itself, I believe we should follow Nielsen.

3
DEBRA ANN LIVINGSTON, Circuit Judge, concurring in part and dissenting in part:

Finding “abundant evidence of the use of abusive, deceptive, and unfair debt

collection practices by many debt collectors,” 15 U.S.C. § 1692(a) (emphasis added),

Congress enacted the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.,

(“FDCPA” or “Act”), “to eliminate [such] practices, to ensure that debt collectors

who abstain from such practices are not competitively disadvantaged, and to

promote consistent state action to protect consumers.” Jerman v. Carlisle, McNellie,

Rini, Kramer & Ulrich LPA, 130 S. Ct. 1605, 1608 (2010). To this end, the FDCPA

imposes civil liability for prohibited debt collection practices on debt collectors—those

who “regularly collect[] or attempt[] to collect . . . debts owed or due or asserted to

be owed or due another.” 15 U.S.C. § 1692a(6). The Act does not, by its terms,

impose liability on creditors. See Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232,

235 (2d Cir. 1998); see also Schmitt v. FMA Alliance, 398 F.3d 995, 998 (8th Cir. 2005)

(noting the distinction between creditors and debt collectors “is fundamental to the

FDCPA, which does not regulate creditors’ activities”) (quoting Randolph v. IMBS,

Inc., 368 F.3d 726, 729 (7th Cir. 2004)) (internal quotation marks omitted).

There is one narrow exception to this rule: the Act treats as a debt collector

“any creditor who, in the process of collecting his own debts, uses any name other

1
than his own which would indicate that a third person is collecting or attempting to

collect such debts.” 15 U.S.C. § 1692a(6). This “false name” exception thus limits

creditor liability to those creditors who collect their own debts while operating

under a pseudonym or name of another—perhaps on the theory that such creditors,

by freeing themselves of any motivation to protect their own names, have become

sufficiently like debt collectors as to merit FDCPA regulation. See Harrison v. NBD

Inc., 968 F. Supp. 837, 841 (E.D.N.Y. 1997) (noting false name exception addresses

circumstance where “natural restraint” exerted on creditors by desire to protect

good will not present). At any rate, and whatever the rationale behind the false

name exception, creditors are not otherwise subject to the FDCPA, be it under the

Act’s plain language or under this Circuit’s case law.

Or at least not until today. The majority now interprets the FDCPA as

imposing liability not just on those creditors who deceptively employ false names

to collect their own debts, but also on those who take the unremarkable step of

hiring a debt collector to collect their debts—so long as that debt collector is, in the

majority’s view, insufficiently involved in “bona fide” collection efforts. See Maj. Op.

at 5, 37. Today, the majority’s approach conflates the deception of a creditor who

uses a third party’s name with the deception of a third-party debt collector who

2
falsely claims to be acting as an attorney. More fundamentally, its “bona fide” test

will over time sow ambiguity into an otherwise straightforward statutory scheme,

auguring both difficult line-drawing exercises for future courts and uncertain

liability for creditors who contract with debt collectors to collect those creditors’

debts. I therefore respectfully dissent from the majority’s determination that the

district court erred in granting summary judgment on Plaintiffs-Appellants’ FDCPA

claim. I concur in the judgment that The Money Store is not a “creditor” under the

Truth in Lending Act, 15 U.S.C. § 1601 et seq.

I.

The FDCPA defines “debt collector” as “any person who uses any

instrumentality of interstate commerce or the mails in any business the principal

purpose of which is the collection of any debts, or who regularly collects or attempts

to collect, directly or indirectly, debts owed or due or asserted to be owed or due

another.” 15 U.S.C. § 1692a(6). Failure to comply with the Act’s requirements

exposes such persons to civil liability. See id. § 1692k(a). One such requirement is

that a debt collector “may not use any false, deceptive, or misleading representation

or means in connection with the collection of any debt.” Id. § 1692e. This includes

“[t]he false representation or implication that any individual is an attorney or that

3
any communication is from an attorney.” Id. § 1692e(3).

In contrast, creditors, defined in relevant part as persons “who offer[] or

extend[] credit creating a debt or to whom a debt is owed,” id. § 1692a(4), are not

regulated by the FDCPA and are not subject to liability under the Act for their own

debt collection practices. The only exception is when creditors collect debts using

the name of another, which then classifies them under the Act as debt collectors:

The term “debt collector” . . . includes any creditor who,
in the process of collecting his own debts, uses any name
other than his own which would indicate that a third
person is collecting or attempting to collect such debts.

Id. § 1692a(6).

The FDCPA further provides that “flat-raters”—third persons who assist a

creditor in using a false name by “providing a form which creates the false

impression that someone (usually a collection agency) besides the actual creditor is

‘participating’ in collecting the debt,” White v. Goodman, 200 F.3d 1016, 1018 (7th Cir.

2000)—are also liable:

(a) It is unlawful to design, compile, and furnish any form
knowing that such form would be used to create the false
belief in a consumer that a person other than the creditor
of such consumer is participating in the collection of or in
an attempt to collect a debt such consumer allegedly owes
such creditor, when in fact such person is not so

4
 participating.

(b) Any person who violates this section shall be liable to
the same extent and in the same manner as a debt collector
is liable under section 1692k of this title for failure to
comply with a provision of this subchapter.

15 U.S.C. § 1692j.

II.

As relevant here, plaintiffs Lori Jo Vincent, Ruth Ann Gutierrez, and Linda

and John Garrido brought a putative class action against The Money Store on behalf

of themselves and all others similarly situated alleging violations of the FDCPA in

“attempting to collect amounts purportedly owed on residential home equity loans.”

J.A. 33-34. The record is devoid of evidence, however, that The Money Store itself

ever communicated with any of the named plaintiffs regarding their loan defaults,

much less that it attempted to collect money from them “using any name other than

[its] own.” 15 U.S.C. § 1692a(6). Instead, each plaintiff received a letter from Moss,

Codilis, Stawiarski, Morris, Schneider & Prior, LLP (“Moss Codilis”). These letters

informed each debtor of his or her default, noting variously that Moss Codilis had

been “retained,” “authorized,” or “designated” to contact the debtor regarding the

5
status of the account.1 As required by the FDCPA, see 15 U.S.C. § 1692g(a)(4), the

letters further advised the debtors that if they disputed the debt in writing within

30 days of receipt, Moss Codilis would provide verification of the debt. Also as

required by the FDCPA, see id. § 1692g(a)(5), the letters advised that Moss Codilis

would inform the debtors of the name and address of the original creditor upon

timely written notice. The breach letters provided contact information for both Moss

Codilis and The Money Store, referring recipients to Moss Codilis in connection with

the above-referenced notifications, among other things, and generally referring

debtors to The Money Store for the purpose of addressing payment.

Moss Codilis prepared and sent these letters pursuant to an April 1997

agreement between it and The Money Store. In the Letter of Agreement, Moss

Codilis principally agreed to prepare and send breach notification letters on a

monthly basis to borrowers who had defaulted on their mortgage loans. The firm

further agreed to provide a “systems person or persons” to facilitate the transfer of

data from The Money Store to Moss Codilis for use in generating the breach letters

and to designate a contact person (“Operations Manager”) to address “questions,

1
As the majority acknowledges, such notices are generally a first step in the debt
collection process and are a prerequisite in virtually all residential mortgages to
commencing any action to enforce lien rights. See Maj. Op. at 10.

6
suggestions, or areas of concern” and to assist The Money Store in developing

periodic training courses for The Money Store’s own staff. Moss Codilis also agreed

to indemnify The Money Store in connection with the breach letter program “for any

losses incurred resulting from the violation of an existing federal or state statute

and/or regulations.”

The Money Store, in turn, committed in the Letter of Agreement to provide

Moss Codilis “with access to books, records, databases, investor guidelines, and files

necessary for the completion of contract duties.” The Money Store reserved the

right to “initially and from time to time review and approve sample forms of the

breach letters . . . based on the format of the breach letter only.” The Agreement

memorializes the Money Store’s objectives in connection with its arrangement with

Moss Codilis:

1. Meet all federal, state, agency and investor
requirements;
2. Reduce [The Money Store’s] costs of handling
defaulted loans;
3. Develop process improvements;
4. Reduce losses on defaulted loans;
5. Obtain training for current staff.

Neither party disputes that Moss Codilis, with The Money Store’s assistance,

drafted template breach letters to comply with applicable state and federal laws; that

7
Moss Codilis thereafter generated over 88,000 breach letters from 1997 through 2000,

using information regarding defaulted loans provided by The Money Store; and that

the firm had numerous follow-up communications with debtors and their lawyers,

both orally and in writing.2 It is further undisputed that Moss Codilis at all relevant

times conducted business separately from The Money Store, had its own employees,

acted under its own name, and represented many other clients in connection with

debt collection services. The record additionally reflects, moreover, that when its

breach letters on behalf of The Money Store proved ineffective at prompting debtors

to pay monies owed, lawyers affiliated with Moss Codilis often became involved in

subsequent legal proceedings on The Money Store’s behalf.

III.

Neither party disputes that Moss Codilis drafted, printed, and mailed letters

informing the plaintiffs that they owed money to The Money Store and that they

should promptly pay that money back. Nor does either party dispute that these

2
Among other things, Moss Codilis provided debt verification information to
debtors upon request, as well as information regarding the identity of original creditors,
as it committed to do in the breach letters. As the majority acknowledges, Christina Nash,
who supervised Moss Codilis’s work for The Money Store, also testified that she
communicated with debtors’ bankruptcy counsel and with attorneys at The Money Store
concerning both bankruptcy proceedings and the discharge of debts in bankruptcy. See
Maj.Op. at 10-11.

8
letters provided Moss Codilis’s contact information and that Moss Codilis had

follow-up communications with some of the letters’ recipients. Yet despite these

undisputed facts, the majority holds that a reasonable fact finder could conclude that

Moss Codilis was not collecting or attempting to collect a debt. This counterintuitive

result is the product of a conflation of § 1692a(6), the FDCPA provision defining as

debt collectors those creditors who employ a false name to deceive debtors that a

third party is collecting their debt, and § 1692e(3), which renders liable those debt

collectors who deceive debtors about the debt collector’s involvement as an attorney.

Only the former type of deception is relevant to the false name exception, and it is

simply not present in this case.3

3
The majority asserts that I am conflating the false name exception with the general
definition of debt collector, see Maj. Op. at 41 n.18, but I am not. Moss Codilis is a debt
collector for the purpose of the FDCPA’s general definition, which provides (again) that
a debt collector is “any person who uses any instrumentality of interstate commerce or the
mails in any business the principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted
to be owed or due another.” 15 U.S.C. § 1692a(6). The problem here is not whether Moss
Codilis is a debt collector. The problem is that The Money Store cannot be liable for
deceptively collecting its own debts using Moss Codilis’s name by virtue of Moss Codilis’s
debt collection efforts—as the majority holds—without departing from the most obvious
meaning of the FDCPA’s false name exception. That exception holds a creditor liable only
when “in the process of collecting his own debts,” the creditor falsely “uses any name other
than his own which would indicate that a third person is collecting or attempting to collect
such debts.” 15 U.S.C. § 1692a(6). It does not provide for creditor liability for hiring a debt
collector who deceives debtors about its involvement as an attorney.

9
 According to the majority, § 1692a(6)’s false name exception applies when:

“(1) the creditor is collecting its own debts; (2) the creditor ‘uses’ a name other than

its own; and (3) the creditor’s use of that name falsely indicates that a third person

is ‘collecting or attempting to collect’ the debts that the creditor is collecting.” Maj.

Op. at 24. I take no issue with this test, which accurately reflects what the text of

§ 1692a(6) requires. My disagreement is rather with the majority’s reformulation of

it, and in particular regarding its third element: that the use of the third party’s

name “falsely indicates” that the third party “is ‘collecting or attempting to collect’

the debts that the creditor is collecting.”

Despite its use of the term, the FDCPA never specifies what activities are

sufficient to constitute “collecting or attempting to collect” a debt. Nor, as the

majority observes, does the term easily lend itself to a precise definition. See Maj.

Op. at 29-30. We need not delineate the outer boundaries of “collecting or

attempting to collect” a debt, however, in order to conclude that the false name

exception does not apply in this case. For while the FDCPA may not precisely

define what does or does not constitute “debt collection,” that does not affect our

ability to determine on this record what is potentially misleading—what is

potentially “false”—about the use of Moss Codilis’s name in the letters sent to

10
plaintiffs. And that, as the very structure of the FDCPA establishes, simply does not

encompass whether Moss Codilis was “collecting or attempting to collect” plaintiffs’

debts.

As the majority notes, what is potentially deceptive about the letters sent to

the plaintiffs is their implication that Moss Codilis attorneys had been retained as

attorneys to collect the plaintiffs’ debts when in reality Moss Codilis did little more

than input plaintiffs’ information into a mass-processed form letter. See Maj. Op. at

20 & n.6. This may violate the FDCPA provision prohibiting debt collectors from

using any “false, deceptive, or misleading representation or means in connection

with the collection of any debt.” 15 U.S.C. § 1692e; see Clomon v. Jackson, 988 F.2d

1314, 1321 (2d Cir. 1993). And this deception (if it occurred) is attributable, at least

in part, to the presence of Moss Codilis’s name—clearly that of a law firm—on the

letters.

But a debt collector’s misrepresentation of its involvement in collecting a debt

as an attorney is different from a creditor’s misrepresentation of its involvement in

collecting a debt as a debt collector. Section 1692e suggests as much, as it requires

defendants to be “debt collectors” under the Act before they can be liable for

misrepresenting their involvement as an attorney in the first place. See 15 U.S.C.

11
§ 1692e, e(3). Even if Moss Codilis’s breach letters may have falsely suggested that

it was collecting or attempting to collect plaintiffs’ debts as an attorney, such

suggestion equates in no way at all with the different proposition that Moss Codilis

also falsely claimed that it was collecting or attempting to collect plaintiffs’ debt. For

as made evident by the very structure of the FDCPA, the question whether Moss

Codilis was collecting or attempting to collect plaintiffs’ debt is separate and apart

from the question whether it was involved in that collection in a legal capacity.

Once this is established, it also becomes clear that Moss Codilis’s breach

letters did not in fact falsely indicate that Moss Codilis was collecting or attempting

to collect plaintiffs’ debts. For while the presence of Moss Codilis’s name on the

letters may have indicated a number of things, the record establishes that it could

have falsely indicated only one thing: Moss Codilis’s involvement in the collection

as a law firm. And as explained above, collecting or attempting to collect a debt in

a legal capacity is not the same as “collecting or attempting to collect a debt”

generally. Consequently, no reasonable fact finder could conclude that the use of

Moss Codilis’s name falsely indicated that it was collecting or attempting to collect

a debt as the third element of the false name exception requires.

That the use of Moss Codilis’s name on the letters did not falsely indicate

12
anything other than its involvement as a law firm is proven through a simple

hypothetical question: if Moss Codilis’s name did not suggest that it was a law firm,

what would have been deceptive or misleading about its presence in the letters? Put

differently, what would Moss Codilis’s name have indicated about its involvement

in collecting plaintiffs’ debt that was not true? That Moss Codilis drafted the letter?

It did. That Moss Codilis mailed out the letter? It did that too. That Moss Codilis

was an independent entity, distinct from The Money Store? It was.

Recognizing this difference between involvement as an attorney and

involvement in “collecting a debt” also reveals the flaw in the majority’s analysis.

The majority, in determining whether Moss Codilis “collected or attempted to

collect” a debt, does not attempt to define that term’s exact meaning under the

FDCPA. Rather, it notes that under this Circuit’s holding in Maguire v. Citicorp Retail

Services, Inc., 147 F.3d 232 (2d Cir. 1998), if a third party sells its letterhead to a

creditor who then mails the letters to its debtors—that is, flat-rating—the third party

has not engaged in debt collection. See Maj. Op. at 31 (citing Maguire, 147 F.3d at

235). It then determines that “[m]erely changing the return address” from the

creditor’s to the third party’s “does not alter the force of Maguire because it does not

change whether the letter misleads consumers, which we have explained is the

13
statutory touchstone for all aspects of the FDCPA, including the false name

exception.” Maj. Op. at 32 (citing Maguire, 147 F.3d at 236).

What this analysis ignores is that the letter in Maguire and the letters in this

case are deceptive for different reasons. In Maguire, the letters falsely suggested that

their sender was someone other than the creditor; here, the letters may falsely

suggest that the sender, Moss Codilis, was involved in collection as an attorney. The

difference between this case and Maguire, therefore, is more than “merely changing

the return address”: it is changing the return address and changing the name on the

letterhead to that of a law firm. As mentioned above, if Moss Codilis’s name did not

suggest that it was a law firm, then the use of its name in the breach letters would

not falsely indicate anything—Moss Codilis did, after all, draft and mail the letters.

In Maguire, meanwhile, even though the third party’s name did not suggest that it

was a law firm, its presence on the letters still suggested that a third party had sent

them—which it had not—thus rendering the letters inherently deceptive.4 All told,

4
Specifically, and as the majority describes, the letters in Maguire were sent by and
bore the letterhead of “Debtor Assistance,” which was an in-house collection department
for the creditor, Citigroup. Maguire, 147 F.3d at 234-35. We held that the false name
exception applied because, even though Debtor Assistance sent the letters, a least
sophisticated consumer could think that Debtor Assistance was an entity separate from
Citigroup. Id. at 237-38. Thus, the use of the name “Debtor Assistance” was deceptive
insofar as it suggested that the letter came from a third party unrelated to Citigroup. Id.

14
once the issue of Moss Codilis’s role as an attorney is separated out, the distinction

between this case and Maguire does not appear “hyper-technical,” as the majority

argues, but wholly logical.5

Further supporting a distinction between this case and Maguire is that the

FDCPA draws the exact same distinction in § 1692j, the flat-rating provision. That

section’s language clearly anticipates that a flat-rater does not itself communicate

with debtors. To the contrary, § 1692j states that a flat-rater “design[s], compile[s],

and furnish[es]” deceptive forms knowing that they “[will] be used” to create the false

belief that someone other than the creditor is participating in the collection of a debt.

Id. § 1692j(a) (emphases added). Notably, a flat-rater does not “send” the forms to

the debtor, nor is the flat-rater the one that actually “uses” the forms to deceive the

debtor. This is all in addition, of course, to § 1692j’s admonition that whoever’s

name is on the deceptive form must not also be participating in the debt collection.

Id.

5
The majority also provides the hypothetical that “The Money Store sent the letters
in sealed, stamped envelopes to Moss Codilis with the note ‘please mail.’” Maj. Op. at 31
n.11. I would concede that, because the presence of a third party’s letterhead might suggest
that the third party drafted the letter as well as sent it, the false name exception might
apply in such a situation. Since, however, it is undisputed that Moss Codilis did draft the
letters sent to the plaintiffs, we need not address this issue.

15
 Given the lack of support in either our own decisions or the text of the FDCPA

for the conclusion it reaches here, the majority understandably looks to the case law

of other circuits. The cases it cites, however, are either inapposite or unpersuasive.6

While the Seventh Circuit’s opinion in Nielsen v. Dickerson, 307 F.3d 623 (7th Cir.

2002), supports the majority’s approach to the false name exception, it also

exemplifies the contradictory conclusions that courts reach by conflating § 1692a(6)

with § 1692e(3). In Nielsen, the Seventh Circuit determined that the debt collection

letter at issue was not really “from” Dickerson as an attorney, and that Dickerson

was therefore liable under § 1692e(3); it also determined that the letter was actually

“from” Household, the creditor, and that Household was therefore liable under

§ 1692a(6) for falsely implying third-party involvement. Id. at 638-39. In other

words, the panel simultaneously held Dickerson liable as a debt collector and held

6
Nor is the majority’s citation of Federal Trade Commission (“FTC”) interpretive
guidance helpful. As an initial matter, the language that the majority cites is not
interpreting § 1692a(6), but rather § 1692e(14), which prohibits acknowledged debt
collectors from “[t]he use of any business, company, or organization name other than the
true name of the debt collector’s business, company, or organization.” See FTC, Statements
of General Policy or Interpretation Staff Commentary on the Fair Debt Collection Practices
Act, 53 Fed. Reg. 50,097, 50,107 (Dec. 13, 1988). And even if the FTC’s standard did apply,
it is not particularly helpful to either party, as it merely adds a new fuzzy standard—that
of using a third party as a “conduit” for collection rather than directly involving the third
party—that is as insufficiently defined as “bona fide” involvement in assessing creditor
liability.

16
Household liable for falsely implying the involvement of a debt collector. I do not

find this reasoning persuasive.

The Fifth Circuit’s opinion in Taylor v. Perrin, Landry, deLaunay & Durand, 103

F.3d 1232 (5th Cir. 1997), meanwhile, is wholly consistent with my reasoning and

stands for the unremarkable proposition that a creditor employing a flat-rater may

trigger the false-name exception. Taylor involved a creditor who, while attempting

to collect debts itself, used a form letter created by a law firm and bearing that firm’s

letterhead and signature. Id. at 1235. Unlike Moss Codilis, the law firm had no

involvement in the collection process other than furnishing the letterhead and form.

This hence presented an obvious example of flat-rating. The creditor constituted a

debt collector under 15 U.S.C. § 1692a(6) because it was using another’s name, and

was further liable under 15 U.S.C. § 1692e(3) because it falsely implied that its

collection letter was from an attorney. Meanwhile, the law firm was liable under

§ 1692j for furnishing the form. Taylor, 103 F.3d at 1237.

The majority departs from this straightforward application of the FDCPA. It

articulates its reformulated test for determining whether a creditor has used

another’s name so as deceptively to suggest this third party’s involvement in

collecting the creditor’s debts as “whether the third party is making bona fide

17
attempts to collect the debts of the creditor or whether it is merely operating as a

‘conduit’ for a collection process that the creditor controls.” Maj. Op. at 37. But this

“bona fide” collection standard appears nowhere in the text of the FDCPA. And

unless the majority intends it as simply the inverse of § 1692j’s flat-rating

standard—an implausible construction of § 1692j—the “bona fide” standard creates

an odd liability gap within the FDCPA: parties like Moss Codilis may be too

involved in collection to be flat-raters under § 1692j, but not involved enough to be

“actually” collecting or attempting to collect the debts at issue.7 In other words,

under this “bona fide” standard, an actual debt collector like Moss Codilis can escape

civil liability under the FDCPA by becoming more involved in deceptive collection

7
The majority insists, in a footnote, that its bona fide debt collection standard is the
inverse of the flat-rating standard—so that assuming The Money Store is liable pursuant
to the false name exception, Moss Codilis’s activities amounted to flat-rating. Maj. Op. at
36 n.16. But the majority is incorrect in arguing that this is anything but an implausible
construction of § 1692j. For Moss Codilis did not “furnish [a] form” to The Money Store
“knowing that such form would be used to create the false belief in a consumer that a
person other than the creditor” was participating in The Money Store’s debt collection
“when, in fact such person” was “not so participating,” as § 1692j requires. Instead, it is
undisputed that Moss Codilis participated in The Money Store’s debt collection efforts by,
among other things, drafting template breach letters to comply with the laws of the
applicable jurisdictions, printing and mailing breach notification letters, and responding
to debtor calls requesting debt verification information or the identity of original creditors.
This is a practice of mass mailing that we have in the past deemed an “economic necessity
. . . in the debt collection industry.” Clomon, 988 F.2d at 1321. With respect, the majority
is obfuscating the meaning of debt collection and flat-rating for future courts.

18
practices. Surely this was not Congress’s intent.

It is by no means evident why we should interpret the FDCPA, contrary to the

most obvious meaning of its terms, to provide such a safe harbor for potentially bad

actors. Nor is it evident why, after having previously noted the “economic necessity

of mass mailing in the debt collection industry” and observing that such mailings

“may sometimes be the only feasible means of contacting a large number of

delinquent debtors,” Clomon, 988 F.2d at 1321, we should subject to civil liability

creditors seeking to outsource this function to a third party. It is also not evident

why courts, in the guise of interpreting the false name exception, should in effect

discourage creditors—assumed to be less prone to abusive debt collection

practices—from remaining involved in the operations of the debt collection agencies

they hire, lest they be deemed themselves to be debt collectors subject to the FDCPA.

The approach announced today will prove vexing, I fear, as future courts

struggle with determining whether a creditor, supposedly exempt from the FDCPA

and despite always acting in its own name, is nevertheless subject to it merely for

hiring a debt collector whose practices are deemed inadequate in some respect.8 The

8
The majority claims this fear is unwarranted and arises out of a failure to consider
its discussion of what the false name exception’s “use” element requires. Maj. Op. at 26 n.8.
With respect, I don’t think so. The majority asserts that its use element requires “that there

19
parameters of the false name exception, heretofore clear, will become unpredictable.

Unless and until Congress deems the arrangements between creditors and

commercial debt collection agencies to be sufficiently rife with abuse as to merit

creditor liability under the FDCPA, courts have no business providing for such

liability themselves through questionable interpretations of the false name

exception. I respectfully dissent from the majority’s judgment vacating the district

court’s grant of summary judgment to The Money Store on plaintiffs’ FDCPA claim.

must be some active involvement in the misrepresentation by the creditor” and that the
“relevant affirmative action” by The Money Store was “retaining Moss Codilis for the
express purpose of sending breach letters that appeared to be attorney collection letters to
its debtors.” Maj. Op. at 26-27. In other words, the majority in its discussion of this
element again conflates the deception of a creditor who collects its own debts while using
a pseudonym or name of another with the different deception of a third-party debt
collector who falsely claims to be acting as an attorney. This approach can only sow
confusion into an otherwise straightforward FDCPA provision.

20