Ruel Nieto v. Simm Associates, Incorporated
926 F.3d 377
7th Cir.2019Background
- Simm Associates sent form collection letters showing: CLIENT: PayPal Credit and ORIGINAL CREDITOR: Comenity Capital Bank, plus balance and origination date.
- Letters stated debtor could request the name and address of the original creditor if different from the current creditor.
- Jessica Smith (E.D. Wis.) and Ruel Nieto (N.D. Ill.) sued on behalf of classes, alleging violation of 15 U.S.C. § 1692g(a)(2) for failing to identify the current creditor and § 1692e for being misleading.
- District courts granted summary judgment for Simm and denied plaintiffs’ motions; appeals were consolidated.
- The Seventh Circuit framed the issue as whether the letters identify the creditor in a manner an unsophisticated consumer would understand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the letter satisfies § 1692g(a)(2) by identifying the creditor | Listing Comenity as “original creditor” (not “current creditor”) could lead consumers to think someone else currently owns the debt | The letter names Comenity (the owner) and also shows the commercial name PayPal Credit, so it clearly identifies the creditor to an unsophisticated consumer | Affirmed for defendant: letter is sufficiently clear under § 1692g(a)(2); not deceptive under § 1692e |
Key Cases Cited
- Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317 (7th Cir. 2016) (use of technical terms can confuse unsophisticated consumers; creditor identification must be clear)
- Chuway v. National Action Financial Services, Inc., 362 F.3d 944 (7th Cir. 2004) (standard for clarity as viewed by an unsophisticated consumer)
- Pettit v. Retrieval Masters Creditor Bureau, Inc., 211 F.3d 1057 (7th Cir. 2000) (description of the unsophisticated consumer standard)
- Minerva Dairy, Inc. v. Harsdorf, 905 F.3d 1047 (7th Cir. 2018) (summary judgment review is de novo)