Lori Jo Vincent, et al. v. The Money Store, Inc. et al | No. 03 cv 2876 (S.D.N.Y.) - Home mortgage lenders hire Moss Codilis to send 88,937 collection letters to defaulted borrowers: borrowers allege this violated the FDCPA and a judge certifies the class

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Lori Jo Vincent, et al. v. The Money Store, Inc. et al | No. 03 cv 2876 (S.D.N.Y.) – Home mortgage lenders hire Moss Codilis to send 88,937 collection letters to defaulted borrowers: borrowers allege this violated the FDCPA and a judge certifies the class

Lori Jo Vincent, et al. v. The Money Store, Inc. et al | No. 03 cv 2876 (S.D.N.Y.) – Home mortgage lenders hire Moss Codilis to send 88,937 collection letters to defaulted borrowers: borrowers allege this violated the FDCPA and a judge certifies the class

Lexology-

In Lori Jo Vincent, et al. v. The Money Store, Inc. et al, No. 03 cv 2876 (S.D.N.Y. February 2, 2015), the United States District Court for the Southern District of New York certified a class of home mortgage borrowers who defaulted on their loans and received uniform “breach letters” from a law firm sent on behalf of the defendant mortgage servicing company and the defendant lenders.

The breach letters informed the debtors that the servicer of their loans, defendant TMS Mortgage, Inc. (TMS), intended to enforce the loans by accelerating the principal and interest and that the law firm had been retained by defendants to collect the debt. The law firm sent out a total of 88,937 breach letters and received a flat fee of $50, later reduced to $35, per letter. The crux of the plaintiffs’ allegation is that the defendants hired the law firm to represent itself as collecting defendants’ debt, but in reality the law firm was simply sending out form letters on firm letterhead at the defendants’ “behest.” The plaintiffs contend that defendants’ conduct violates the “false name exception” of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692e(6).

Generally, creditors are not subject to the FDCPA. See Maguire v. Citicorp Retail Servs., Inc., 147 F.3d 232, 235 (2d Cir. 1998). However, under the “false name exception,” the FDCPA defines debt collectors as creditors “who, in the process of collecting [their] own debts, use[ ] any name other than [their] own which would indicate that a third person is collecting or attempting to collect such debts.” 15 U.S.C. § 1692a(6); Catencamp v. Cendant Timeshare Resort Group-Consumer Fin., Inc., 471 F.3d 780, 782 (7th Cir. 2006) (citingMaguire v. Citicorp Retail Servs., Inc., 147 F.3d 232 (2d Cir. 1998)). The “false name exception” applies to any creditor who, in the process of collecting its debts, “indicate[s] that a third party is collecting or attempting to collect such debts . . . pretends to be someone else or uses a pseudonym or alias . . . or . . . [who] owns and controls the debt collector, rendering it the creditor’s alter ego.” See Mazzei v. Money Store, 349 F. Supp. 2d 651, 659 (S.D.N.Y. 2004) (internal quotations and citations omitted).

[LEXOLOGY]

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