The opinion of the court was delivered by: Bucklo, District Judge.
MEMORANDUM OPINION AND ORDER
Andrew Peters brought this class action against AT & T Corporation ["AT
& T"], GC Services Limited Partnership ["GC Services"], DLS Enterprises,
Inc. ["DLS"], and GC Financial Corporation ["GC Financial"], for
violations of the Fair Debt Collection Practices Act ("FDCPA"),
15 U.S.C. § 1692 et seq. All of the parties move for summary
judgment. For the following reasons, all of the motions are denied.
This lawsuit arises from a letter Mr. Peters received from GC Services
regarding his overdue balance with AT & T. The letter was written on GC
Services letterhead, and reads as follows:
WE HAVE BEEN INFORMED THAT YOU PRESENTLY HAVE A LONG
OVERDUE BALANCE (NOTED ABOVE) FOR AT & T LONG DISTANCE TELEPHONE
SERVICE. THEY HAVE ASKED U.S. TO HELP RESOLVE THIS MATTER.
YOU HAVE BEEN A VALUED CUSTOMER TO AT & T, AND THEY ARE ANXIOUS TO HAVE
YOU SETTLE YOUR ACCOUNT WITHOUT FURTHER COLLECTION ACTIVITY. PLEASE MAIL
YOUR PAYMENT PROMPTLY ALONG WITH THE BOTTOM PORTION OF THIS LETTER
— TO AT & T IN THE ENCLOSED ENVELOPE.
IF YOU FAIL TO SETTLE THIS ACCOUNT, FURTHER COLLECTION ACTIVITY WILL BE
TAKEN BY U.S. OR ANOTHER AGENCY. THANK YOU FOR YOUR PROMPT ATTENTION TO
THIS MATTER. IF YOU HAVE ANY QUESTIONS CONCERNING THIS ACCOUNT, PLEASE
CONTACT YOUR AT & T BUSINESS OFFICE AT 1-800-532-7486.
The letter directs Mr. Peters to make his check or money order payable to
AT & T. The address, but not the phone number, for GC Services is
included in the letterhead. The class of plaintiffs has received similar
AT & T's strategy for collecting past due debts can be summed up as
follows. If debtors do not pay money owed to AT & T& after it sends its
own delinquency notices, AT & T hires a professional debt collector, such
as GC Services. AT & T electronically transmits to GC Services the amount
owed by the debtor as reflected in AT & T's records. AT & T then pays GC
Services a $0.54 per account fee for GC Services' initial collection
efforts ("Stage I"), which include sending form letters such as the one
received by Mr. Peters. If debtors do not respond, AT & T hires either GC
Services or another debt collector and pays that debt collector a
contingent fee to perform further collection activities ("Stage II").
The plaintiffs allege that Stage I of AT & T's collection scheme is
misleading and subjects AT & T, GC Services, and the general partners of
GC Services to liability as debt collectors under the FDCPA. All of the
parties have filed motions for summary judgment.
The FDCPA holds debt collectors liable for deceptive practices.
Although a creditor is generally exempt from liability under the FDCPA
when it collects its own debts, a creditor becomes a debt collector
within the meaning of the statute when, "in the process of collecting his
own debts, [he] 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). The plaintiffs argue that AT & T merely used GC
Services' name to collect its own debts, and is therefore a debt
collector under the FDCPA. The plaintiffs further argue that AT & T's
efforts to suggest that GC Services is involved in collecting debts is
misleading in violation of 15 U.S.C. § 1692 (e).*fn1 In its
cross-motion for summary judgment, AT & T argues that GC Services was
actually hired to help AT & T collect debts, and that GC Services was
involved in debt collection. According to AT & T, AT & T is ...