FDCPA Case Challenges Use of Trade Name Abbreviation

On Tuesday a federal judge in New Jersey dismissed a putative class action under the Fair Debt Collection Practices Act (FDCPA) alleging that the use of an abbreviation for a registered trade name in a voicemail message violated § 1692 of the FDCPA. The case is Levins v. Healthcare Revenue Recovery Group, LLC, (Case No. 1-17-cv-00928, U.S.D.C, District of New Jersey). 

Specifically, plaintiffs contended that the collection practices of defendant Healthcare Revenue Recovery Group (HRRG) violated the FDCPA, because the practices: 

(a) fail to provide meaningful disclosure of HRRG’s identity;

(b) use false representations and deceptive means to collect or attempt to collect any debt and to obtain information concerning a consumer; and

(c) use the name of any business, company, or organization other than the true name of the debt collections business, company, or organization. 

A copy of the court’s opinion can be found here. 

Background

HRRG is a Limited Liability Company existing pursuant to the laws of the State of Florida. It operates as a debt collector, with principal place of business in City of Sunrise, Florida. “ARS Account Resolution Services” is an unincorporated division of HRRG and registered as an alternative trade name for HRRG with the State of New Jersey. 

Plaintiffs allegedly owed a medical debt. That debt was placed with HRRG for collection. HRRG then contacted plaintiffs via telephone and left messages in an attempt to collect the alleged debt. HRRG’s pre-recorded message is transcribed as follows: 

ARS calling. Please return our call at 1-800-694-3048. ARS is a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose. Again, our number is 1-800-694-3048. Visit us at www.arspayment.com. 

Plaintiffs alleged that this message violates FDCPA. First, they maintained that it does not satisfy the “meaningful disclosure” requirement. § 1692(d)(6). Plaintiff noted that there are other debt collectors, along with numerous other types of businesses, that use the name “ARS” in New Jersey. As such, plaintiffs maintained that the only way for plaintiffs and/or a least sophisticated consumer to obtain the identity of the caller, and to ascertain the purpose underlying the messages, was to place a return call to the telephone number provided. Plaintiffs alleged that this constituted an inappropriate duty to investigate.

Plaintiffs further contended that it is deceptive and improper to abbreviate “ARS Account Resolution Services” as “ARS” for the purposes of collection because “ARS” is not the defendant corporation’s true name. Plaintiffs brought this case as a class action on behalf of all persons with addresses in the State of New Jersey for whom HRRG left such a voice message. 

HRRG brought a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief may be granted. 

The Court’s Opinion 

The court granted HRRG’s motion to dismiss.

First the court addressed the “meaningful disclosure” argument. 

Per the opinion: 

“HRRG maintains that the messages it left are within relevant parameters allowed by the FDCPA. HRRG’s position is correct—the facts pleaded do not constitute violations of the FDCPA and thus the Plaintiffs have not presented a plausible basis for relief. 

HRRG’s messages unmistakably inform the consumer that HRRG is calling to collect a debt. ARS is an alternate trade name for HRRG registered with the State of New Jersey. The least sophisticated consumer understands that “[t]his is an attempt to collect a debt” unambiguously means just that. A return number and website are provided as well should the consumer have any questions as to the caller’s identity or intentions. 

Such plain identification and disclosure leaves no doubt as to the nature of the call and who Plaintiffs allegedly owe money to. As such, HRRG’s messages satisfy the meaningful disclosure requirement.” 

The court then addressed the use of the abbreviation “ARS” as an alternative trade name. The court noted that “§1692(e)(14) of the FDCPA states that no business, company, or organization may use a name other than its true name. But, “true name" has been found to include registered alternate names. See Boyko v. Am. Int’l Group., Inc., No. 08-2214, 2012 WL 2132390 (D.N.J. June 12, 2012). To use an alternate name, the business, company, or organization must register or license the alternate name where it was incorporated, where it maintained its principal place of business, or where the Plaintiff was injured.” 

The court then noted: 

“Plaintiffs maintain that abbreviating “ARS Account Resolution Services” to “ARS” for the purposes of the phone message is improper. This Court cannot agree. See Pescatrice v. Elite Recovery Serv., 2007 U.S. Dist. LEXIS 29616 (S.D. Fla. 2007). The word “name” encompasses references to a corporation by its initials. See Strand v. Diversified Collection Serv., 380 F.3d 316 (8th Cir. 2004). HRGG registered the name “ARS Account Resolution Services” as an alternate trade name with the State of New Jersey. Plaintiffs’ alleged injury occurred in the State of New Jersey. As such, HRRG’s use of “ARS” is acceptable. Such an abbreviation of HRRG’s trade name does not prejudice Plaintiffs—it is not deceptive.” 

Finally, the court addressed the issue of whether the phone calls constituted false representation or deceptive means of collecting. 

“As discussed, HRRG’s use of “ARS” constitutes a “true name” and provides meaningful disclosure of HRRG’s identity. Plaintiffs and/or least sophisticated consumers can tell who is calling and for what reason. While Plaintiffs argue that the inclusion of a phone number and internet website improperly shifts the burden to the consumer to investigate the nature of the call, this is not so. Instead, these additions constitute further means of ensuring that there are not any mistaken or false representations about either identity or purpose. Furthermore, HRRG warns consumers that any information provided in these calls will be used to collect a debt. Thus there is no violation of 15 U.S.C. § 1692(e)(10), as any attempts to collect information have been explicitly flagged and are therefore not deceptive.” 

insideARM Perspective

This a good case to study when considering using trade names or abbreviations of trade names in any communications with a consumer. 

The ARM industry is made up of a myriad of 3-initial companies. In fact, insideARM is aware of at least several other companies in the ARM space that use the “ARS” acronym. It can be confusing. 

While the court in this case did not spend a lot of time discussing it, insideARM believes that the reference to the company website in the voicemail message was a significant factor in determining that HRRG had provided meaningful disclosure. The reference to the website negates any argument about confusion as to other ARM firms with the same acronym.