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Oberther v. Midland Credit Management, Inc.

United States District Court, D. Massachusetts

September 15, 2014

MARY OBERTHER, on behalf of herself and all others similarly situated, Plaintiff,
v.
MIDLAND CREDIT MANAGEMENT, INC., MIDLAND FUNDING, LLC, and ENCORE CAPITAL GROUP, INC., Defendants

For Mary Oberther, on behalf of herself and all others similarly situated, Plaintiff: Sergei Lemberg, LEAD ATTORNEY, Lemberg & Associates, Stamford, CT.

For Midland Credit Management, Inc., Midland Funding, LLC, Encore Capital Group, Inc, Defendants: Kara G. Thorvaldsen, William T. Bogaert, LEAD ATTORNEYS, Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, Boston, MA.

Page 126

MEMORANDUM AND ORDER REGARDING DEFENDANTS' MOTION TO DISMISS (Dkt. No. 15)

MARK G. MASTROIANNI, United States District Judge.

I. Introduction

Mary Oberther (" Plaintiff" ) brings this putative class action against Midland Credit Management, Inc., Midland Funding, LLC, and Encore Capital Group, Inc. (" Defendants" ). Plaintiff asserts that Defendants violated the Fair Debt Collection Practice Act, 15 U.S.C. § 1692, et seq.

Page 127

(" FDCPA" ) by sending a letter that uses false representations and deceptive means to collect a debt (Count I) and that " overshadows" her right to dispute a debt (Count II). Defendants have filed a motion to dismiss asserting that Plaintiff's complaint fails to state a claim upon which relief may be granted. For the following reasons, the court will grant Defendants' motion in part and deny it in part.

II. Background

The following facts come directly from Plaintiff's complaint and the attachment thereto. Prior to October of 2013, Plaintiff opened a credit account with Capital One, N.A. (Complaint (" Compl." ) ¶ 13.) She used the account to acquire personal household items and, therefore, she is a " consumer" under 15 U.S.C. § 1692a(3) and she incurred " debt" under 15 U.S.C. § 1692a(5). (Id. ¶ ¶ 4, 14.) At some point, the account went into arrears and Capital One, N.A. sold the account to Midland Funding. (Id. ¶ ¶ 15-16.) Midland Funding is a business entity engaged in the business of collecting or attempting to collect debt and, therefore, is a " debt collector" within the meaning of 15 U.S.C. § 1692a(6). (Id. ¶ ¶ 6-7.) Midland Credit is an affiliate of Midland Funding and is also a " debt collector" under 15 U.S.C. § 1692a(6) because it is engaged in the business of collecting or attempting to collect debt on behalf of Midland Funding as one of its principal areas of business. (Id. ¶ ¶ 8-9.) Encore is the parent company of Midland Credit and Midland Funding. (Id. ¶ 11.) Plaintiff alleges that " [t]hrough Midland Credit, Encore contacts customers directly in attempts to collect debts on behalf of the current creditor" and that Encore is also a " debt collector" under 15 U.S.C. § 1692a(6) because it is in the business of collecting or attempting to collect debt owed to another as one of its principal areas of business.[1](Id.)

After Midland Funding acquired Plaintiff's account, it, " through Encore and Midland Credit," sent Plaintiff a collection letter in an attempt to collect the debt. (Id. ¶ 17.) The letter, dated October 31, 2013, explained that on October 21, 2013, Plaintiff's Capital One account was sold to Midland Funding and that Midland Credit " will be collecting on, and servicing your account." (Id. ¶ 19; Exhibit A (attached to Compl.).) The letter continued:

Midland Credit Management, Inc. is considering forwarding this account to an attorney in your state for possible litigation. However, such forwarding will not occur until after the expiration of the time period described on the back of the letter. Upon receipt of this notice, please call to discuss your options.
If we don't hear from you or receive payment by 12-15-2013, we may proceed with forwarding this account to an attorney.
What do you need to do to stop this process from continuing?

1) Mail in $500 and call to set up your remaining payments.
2) Call us to see how to qualify for discounts and payment plans.
LET U.S. HELP YOU! If the account goes to an attorney, our flexible options may no longer be available to you. There is an opportunity to make arrangements with us. We encourage you to call us: (800) 265-8825.

( Id.) On the reverse side, the letter provided " important disclosure information," including the notifications required by 15 ...


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