Title: FREDDIE D. JOHNSON v. STATEWIDE COLLECTIONS, INC., A/D/B/A CHECKRITE

State: wyoming

Issuer: Wyoming Supreme Court

Document:

FREDDIE D. JOHNSON v. STATEWIDE COLLECTIONS, INC., A/D/B/A CHECKRITE1989 WY 157778 P.2d 93Case Number: 88-285Decided: 07/21/1989Supreme Court of Wyoming
FREDDIE D. JOHNSON, 
PETITIONER,

v.

STATEWIDE COLLECTIONS, 
INC., A/D/B/A CHECKRITE, RESPONDENT.

Appeal from the County 
Court, NatronaCounty.

John I. Henley, 
Vlastos, Brooks & Henley, P.C., Casper, for petitioner. 

ARE NOT AN 
OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] 

John C. Hoard, 
Casper, for respondent.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY and 
GOLDEN, JJ.

THOMAS, 
Justice.

[¶1.]     This case, one of first 
impression in Wyoming, presents questions relating to the applicability of the 
federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 to 1692o 
(1977), relating to abusive, deceptive, and unfair debt collection practices to 
the efforts of a Wyoming collection agency to collect a check upon which the 
drawer had stopped payment. A threshold question challenges the jurisdiction of 
the district court to review a decision of a county court in a case brought 
under the small claims statutes, §§ 1-21-201 to 1-21-205, W.S. 1977. In 
addition, an issue is asserted with respect to whether § 1-1-115, W.S. 1977, 
which prescribes the notice requirements for collection of dishonored checks and 
justifies attorney fees, could be invoked to award attorney fees to anyone other 
than a collection agency.

[¶2.]     Freddie Johnson 
(Johnson) obtained a judgment in county court against Statewide Collections, 
Inc. d/b/a CheckRite (CheckRite) for various violations of the federal statutes. 
CheckRite appealed that judgment to the district court, and that court reversed 
the judgment of the county court. Johnson then sought review in this court by a 
Petition for Writ of Certiorari, which was granted. We hold that the district 
court did have jurisdiction to review this case on appeal from the county court; 
the provisions of § 1-1-115, W.S. 1977, require no construction in this 
instance; and, while we agree with the district court that some of the 
violations found by the county court are not established by the record in this 
case, there were violations of the federal statutes. We reverse the decision of 
the district court and reinstate the judgment entered in the county 
court.

[¶3.]     In his brief as 
Petitioner, Johnson stated the issues presented for review to be: 

"I. Whether 
non-verification of a debt by the debt collector is in violation of 15 U.S.C. § 
1692g, which mandates that a debt collector obtain verification of an alleged 
debt, if put on notice by the alleged debtor or his agent, that the debt is in 
dispute.

"II. Whether the debt 
collector breached 15 U.S.C. § 1692f(2) by attempting to collect more than it 
statutorily or contractually could when such statute specifically prohibits such 
conduct and there was no testimony at the trial level that this was merely an 
inadvertent clerical error, nor was there any such factual finding by the trial 
court.

"III. Whether the debt 
collector violated 15 U.S.C. § 1692c(a)(2) in that it sent an additional demand 
letter to the alleged debtor with knowledge that the alleged debtor was 
represented by an attorney.

"IV. Whether the debt 
collector violated 15 U.S.C. § 1692e(14) by failing to advise the alleged debtor 
of its true name when the debt collector sent its initial demand 
letter.

"V. Whether the debt 
collector violated 15 U.S.C. § 1692j and/or acted in bad faith by failing to 
give notification to the alleged debtor that the debt collector was not in fact 
the true holder of the instrument after it had represented that it was and was 
authorized to attempt to collect the alleged debt.

"VI. Whether Wyoming 
Statute 1-1-115 was enacted for the exclusive use of debt collection 
agencies.

"VII. Whether the 
District Court of the Seventh Judicial District had any jurisdiction to consider 
an appeal from the small claims division of Natrona County 
Court.

Alluding to the 
Order Granting Petition for Writ of Certiorari in which the issues were framed 
in accordance with the petition, CheckRite adopted the same issues for purposes 
of its brief.

[¶4.]     On November 11, 1986, 
Johnson purchased an inexpensive shotgun from a retail store in Casper, and he paid for 
the shotgun by drawing a check. The shotgun was purchased in the evening, and 
Johnson attempted to clean it after he had taken it home. He found that the 
action was defective and would not open. Early the next morning, he returned the 
shotgun to the seller and requested the return of his check or a refund. An 
employee of the store accepted the shotgun, but Johnson's request for a refund 
or the return of his check was refused. The employee advised that refunds or 
returns of checks were not permitted by store policy. The record does not 
establish what the store intended to do about the transaction, but Johnson, 
after advising the store employee of his course of action, contacted his bank 
and stopped payment of his check. The bank followed Johnson's instruction and 
returned the check when it was presented. The store then sent the check to 
CheckRite for collection.

[¶5.]     In the meantime, 
Johnson attempted to resolve the matter by contacting the store. Instead of 
working things out with Johnson, the store simply referred him to CheckRite. 
When Johnson contacted CheckRite, he was referred back to the store with the 
advice that he must take up any problems about either the merchandise or his 
check directly with the store personnel. At this juncture, Johnson did not have 
the shotgun, he did not have his check back, and he had no satisfactory 
information from the store as to what it proposed to do about the defective 
merchandise.

[¶6.]     On November 21, 
CheckRite sent a "Return Check Notice" to Johnson stating that $144.99 was due 
and that he should make an immediate payment in that amount directly to 
CheckRite. The $15 difference between the amount demanded and the $129.99 for 
which the check originally had been drawn was attributable to a "service 
charge." This notice did not, in any way, refer to the corporate name of 
CheckRite, which is Statewide Collections, Inc. Johnson promptly contacted his 
attorney, and the attorney wrote a letter to the store stating that Johnson 
disputed the alleged debt. That letter was sent by certified mail, and a copy 
was sent, also by certified mail, to CheckRite. 

[¶7.]     After it received the 
attorney's letter, CheckRite sent a second notice directly to Johnson, using 
certified mail, in which it referred to § 1-1-115, W.S. 1977, and, again, 
demanded payment. In this notice, the name of the sender was Statewide 
Collections, Inc. d/b/a CheckRite. By this demand, Johnson was advised that the 
amount due was $148.16 if paid by January 8, 1988 but, after that date, the 
amount would increase to $293.15.

[¶8.]     The two notices sent to 
Johnson were the only communications from either CheckRite or the retail store. 
Verification of the alleged debt was never furnished to Johnson, and no 
correspondence was sent to Johnson's attorney despite his letter to the store 
with a copy to CheckRite. CheckRite did contact the retail store after receiving 
the attorney's letter and was advised that the store wanted the check pursued. 
Subsequently, the store reached a different decision, deciding not to pursue the 
collection, and asked CheckRite to return the check to it. CheckRite did return 
the check, but it never advised Johnson, or his attorney, of this fact, which 
was disclosed for the first time at the trial.

[¶9.]     This action then was 
initiated in the CountyCourtofNatronaCounty. Johnson alleged that CheckRite had 
violated the FDCPA, 15 U.S.C. § 1692 to 1692o, and that he had been damaged in 
the amount of $738 plus court costs as a result. Because the amount of damages 
claimed was less than $750, Johnson proceeded in Natrona County Court 
pursuant to §§ 1-21-201 to 1-21-205, W.S. 1977 (June 1988 Repl.), which provide 
the procedure for small claims cases. We understand that Johnson intentionally 
limited his claim to keep it within the small claims statutes, even though the 
FDCPA provides authority for recovery of actual damages plus attorney fees plus 
an additional civil penalty of up to $1000. 15 U.S.C. § 1692k. After trial, the 
county court adopted the "Findings of Fact and Conclusions of Law" proposed by 
Johnson and entered its order and judgment accordingly. It was this ruling that 
CheckRite appealed to the district court, and that court, finding error, 
reversed the county court and dismissed all claims on October 17, 1988. Johnson 
pursued a "Petition for a Writ of Certiorari" in accordance with Rule 13.01, 
W.R.A.P. and § 5-2-119, W.S. 1977 (Cum.Supp. 1988). We deemed the resolution of 
certain issues in this case to be important and granted Johnson's petition, 
ordering that briefs be submitted on specified questions.

[¶10.]  With respect to the threshold question of 
the jurisdiction of the district court to review on appeal a case brought within 
the small claims statutes, Johnson's position in attempting to preserve his 
judgment from appellate review in the district court was that there is no 
statutory authority that expressly authorizes such review, and that the 
legislative policy in providing an expedited and informal procedure for the 
adjudication of claims that did not exceed $750 assumes that no appeal would 
follow.1 CheckRite counters with the 
proposition that such a case is no different than any other case within the 
civil jurisdiction of a county court set forth in § 5-5-131, W.S. 1977, and that 
the power to review on appeal is inherent in the district 
court.

[¶11.]  We acknowledge and accept Johnson's 
premise that, if the jurisdiction to review on appeal is absent, then the order 
by the district court reversing the judgment of the county court would be a 
nullity. Fauntleroy v. Lum, 210 U.S. 230, 28 S. Ct. 641, 52 L. Ed. 1039 
(1908); Earle v. McVeigh, 91 U.S. 503, 23 L. Ed. 398 (1875); See 
Matter of Contempt Order Issued Against Anderson, 
765 P.2d 933 (Wyo. 1988). We have no equivocation, however, 
in recognizing the jurisdiction of the district court to review this judgment on 
appeal.

[¶12.]  Appeals from courts of limited 
jurisdiction, including both county courts and justice of the peace courts, are 
specifically authorized by § 5-2-119, W.S. 1977 (Cum. Supp. 1988). Additional 
legislative authority is set forth in § 5-5-142, W.S. 1977 (Cum.Supp. 
1988):

"A party may appeal from 
any final judgment or sentence of a county court. The appeal may be taken to the 
district court within ten (10) days after the entry of the judgment by filing a 
notice of appeal in the county court."

Further 
authority is promulgated in Rule 1.03, W.R.A.P., which 
provides:

"Rule 1.03. Review by 
district court.

"A judgment rendered or 
final order made by an administrative agency or any court inferior in 
jurisdiction to the district court may be reversed, vacated, remanded or 
modified upon an appeal taken to the district court for errors appearing on the 
record."

[¶13.]  Johnson's argument is that neither the 
statutes nor the rule encompasses the requisite specificity to authorize an 
appeal from, what he describes as, a "small claims division" of the county 
court. Johnson overlooks the fact that no statute establishes a small claims 
division of the county court. Instead, the provisions of §§ 1-21-201 through 
1-21-205, W.S. 1977, collectively entitled "Article 2. Procedure for Small 
Claims," simply articulate an informal procedure. Cf. Board of Commissioners of 
NatronaCounty v. Justice Court No. 
Two, 529 P.2d 977 (Wyo. 1974) (affirming the 
establishment of small claims proceedings in Wyoming under various statutes). We emphasize 
that these statutes establish procedure, not a separate court or court 
function.2 We do not perceive any special 
factor relating to county courts that would justify adopting Johnson's premise. 
Section 1-21-201, W.S. 1977, identifies only cases in a justice of the peace 
court. In § 1-21-202(a), however, reference is made to the county court. 
Furthermore, § 5-5-105, W.S. 1977, incorporates the legislative concept of 
affording authority to the county court to resolve those cases previously 
submitted in justice of the peace courts. More specifically, § 5-5-131(a)(iv), 
W.S. 1977 (Cum.Supp. 1988), grants to a county court civil jurisdiction of those 
"[a]ctions for small claims as provided by W.S. 1-21-201 through 1-21-205." 
Following the rule set forth in Story v. State, 755 P.2d 228 (Wyo. 1988), and 
State Board of Equalization v. Tenneco Oil Co., 694 P.2d 97 (Wyo. 1985), these 
several sections, when construed in pari materia, simply define a simplified 
procedure governing cases in county courts in which the amount in controversy 
was less than $750. The statutes do not address jurisdiction in any separate way 
that would justify a conclusion that the judgments in such cases are not within 
the appellate review jurisdiction of the district court. We perceive such 
actions as being no different, other than the informal procedure, from any other 
civil actions triable in county courts or justice of the peace courts, and it 
follows that appellate jurisdiction is assigned to the district court within the 
same county. Wyoming Constitution, Article 5, § 10. 
Jurisdiction to review on appeal to the district court was present in this 
case.

[¶14.]  We then must consider the merits of the 
several asserted grounds for recovery under the FDCPA. Congress adopted this 
legislation in 1977 to protect consumers from abusive, deceptive, and unfair 
debt collection activities by eliminating certain offensive and unethical 
practices in vogue with many third-party debt collectors. Zimmerman v. HBO 
Affiliate Group, 834 F.2d 1163 (3rd Cir. 1987); Staub v. Harris, 626 F.2d 275, 
62 A.L.R.Fed. 544 (3d Cir. 1980); Riveria v. MAB Collections, Inc., 682 F. Supp. 174 (W.D.N.Y. 1988). The perceived need for such legislation had become apparent 
on an ascending scale in those years immediately preceding its enactment because 
it was recognized that abusive debt collection rapidly was becoming "a 
widespread and serious national problem." Riveria, 682 F. Supp.  at 176. The 
objectionable practices, still prevalent even after the adoption of the FDCPA, 
often are exacerbated because independent collectors generally are unconcerned 
with the consumer's opinion of them, or their own reputations in the eyes of the 
public, and they proceed accordingly. This attitude is different from that of 
the direct creditor who often wishes to maintain some good will as well as some 
prospect of salvaging future business from their effort. Zimmerman; Riveria; 
Kimber v. Federal Financial Corp., 668 F. Supp. 1480 (M.D.Ala. 1987); Bingham v. 
Collection Bureau, Inc., 505 F. Supp. 864 (D.N.D. 1981). Some of the 
objectionable practices, more blatant and egregious than others, that transgress 
the FDCPA include obscene and profane language, direct threats of violence, 
harassing phone calls made at any and all hours of the day or night, disclosure 
of the debtor's personal affairs to friends and employers, attempts to collect 
more than is owed, intentional misrepresentation of legal rights and 
obligations, and impersonation of public officials and attorneys. Riveria; 
Bieber v. Associated Collection Services, Inc., 631 F. Supp. 1410, (D.Kan. 
1986). See United 
States v. Central Adjustment Bureau, Inc., 667 F. Supp. 370 (N.D.Tex. 1986).

[¶15.]  Because the goal of the FDCPA is to 
eliminate abusive collection practices, it is applicable whether or not a valid 
debt exists. Baker v. G.C. Services Corp., 677 F.2d 775 (9th Cir. 1982). A 
violation of the FDCPA cannot be defended even by establishing that the debt was 
long overdue and difficult to collect. Standing is afforded an aggrieved 
consumer to proceed under the act as long as the collector was purporting to 
attempt to collect an alleged debt. In a report from the subcommittee, its 
chairman said, "every individual, whether 
or not he owes the debt, has the right to be treated in a reasonable and 
civil manner." 123 Cong. Rec. 10241 (1977); Baker, 677 F.2d  at 777. The reach of 
the statute is limited, however, to third party debt collectors, and it has no 
force with respect to "persons or businesses collecting debts on their own 
behalf." Staub, 626 F.2d 275, 277, 62 A.L.R.Fed. 544 (3rd Cir. 
1980).

[¶16.]  Administrative enforcement of the FDCPA 
is assigned to the Federal Trade Commission, 15 U.S.C. § 1692l, but the primary 
enforcement, in order to eliminate the objectionable practices, is self 
enforcement by the aggrieved debtor acting as a "private attorney general" 
through a civil action like that initiated by Johnson. 15 U.S.C. § 1692k; 
Zimmerman, Staub, Riveria; West v. Costen, 558 F. Supp. 564 (W.D. Va. 1983). The 
incentive provided by the FDCPA for private enforcement is the recovery of 
attorney fees and costs, plus a civil penalty of up to $1000, in addition to 
actual damages when the debtor is successful in the civil action. 15 U.S.C. § 
1692k; Costen. While the FDCPA does yield to local law providing equal or 
greater protection and does permit the Federal Trade Commission to exempt from 
the act debt collection practices within the state, if it determines that those 
debt collection practices are subject to substantially similar requirements, the 
Wyoming 
legislature has not addressed the problem by enacting parallel, or more severe, 
legislation. Consequently, the FDCPA and other federal law on this subject are 
controlling for the disposition of this case. 15 U.S.C. § 1692, 1692n, 
1692o.

[¶17.]  Against this general background, we 
address the several claimed violations of the FDCPA that Johnson contends 
support the judgment awarded by the county court. The first of those arises 
under 15 U.S.C. § 1692g(b) which provides:

"(b) Disputed debts. If 
the consumer notifies the debt collector in writing within the thirty-day period 
described in subsection (a) of this section that the debt, or any portion 
thereof, is disputed, or that the consumer requests the name and address of the 
original creditor, the debt collector shall cease collection of the debt, or any 
disputed portion thereof, until the debt collector obtains verification of the 
debt or a copy of a judgment,

 

or the name and address 
of the original creditor, and a copy of such verification or judgment, or name 
and address of the original creditor, is mailed to the consumer by the debt 
collector."

This provision 
of the FDCPA requires the verification, or validation, of the alleged debt in 
order to prevent collection activities from being directed against the wrong 
person or against a debtor who has paid. Swanson v. Southern Oregon Credit 
Service, Inc., 869 F.2d 1222 (9th Cir. 1988); Staub, 626 F.2d  at 277; Riveria, 
682 F. Supp. 174. The language of the statute is clear and unambiguous, and we 
defer to the plain and ordinary meaning of the words finding it unnecessary to 
resort to any extrinsic material for either their construction or for the 
resolution of this case. Blue Cross Association v. Harris, 664 F.2d 806 (10th 
Cir. 1981); Sanchez v. State, 751 P.2d 1300 (Wyo. 1988); Paravecchio v. Memorial 
Hospital of Laramie County, 742 P.2d 1276 (Wyo. 1987), cert. denied ___ U.S. 
___, 108 S. Ct. 1088, 99 L. Ed. 2d 249 (1988); State Board of Equalization v. 
Jackson Hole Ski Corp., 737 P.2d 350, clarified on reh. 745 P.2d 58 (Wyo. 1987); City of Evanston v. Robinson, 702 P.2d 1283 (Wyo. 1985); McArtor v. State, 699 P.2d 288 (Wyo. 
1985).

[¶18.]  On December 3, 1987, in response to 
CheckRite's notice dated November 21, 1987, counsel for Johnson furnished 
CheckRite with a carbon copy of a letter addressed to the retail store advising 
that the debt was disputed. CheckRite, according to its manager, contacted the 
retail store and was advised that the check had been given by Johnson and that 
the store wanted it pursued. CheckRite did not send verification of the debt to 
either Johnson or Johnson's attorney. The manager testified that he had 
communicated with the retail store on several other occasions on each of which 
the debt was verified to him.

[¶19.]  It was CheckRite's duty, under the 
statute, to cease collection activities on the date it received the letter from 
Johnson's counsel until it sent Johnson, through his counsel, verification of 
the alleged debt. Staub. The congressional intent is plain and no other meaning 
can possibly be imposed for this portion of the statute. Sanchez. The mandatory 
form of the word "shall" is used in the statute. CheckRite argues that the 
purpose of this statute is simply to inform the consumer of the basis of the 
claim being collected and that it does not encompass a situation in which the 
alleged debtor had notice of the debt. CheckRite's position is not sound 
because, in furtherance of its purpose, the statute does encompass those 
situations in which the alleged debtor may have adequate prior notice or 
knowledge of the alleged debt. Swanson; Staub; Riveria. Federal precedent 
suggests that "in construing a statute we are obliged to give effect, * * *, to 
every word Congress used." Reiter v. Sonotone Corp., 442 U.S. 330, 339, 
99 S. Ct. 2326, 2331, 60 L. Ed. 2d 931 (1979); Baker, 677 F.2d  at 778. Application 
of that concept to this statute manifests an implicit requirement that the 
verification furnished from the creditor be in writing because the statute also 
requires that a copy of the verification be mailed to the consumer. See Hamlin 
v. Transcon Lines, 701 P.2d 1139 (Wyo. 1985); 
State v. Sodergren, 686 P.2d 521 (Wyo. 1984). With that implicit requirement, an 
oral validation of a debt is not sufficient to comply with the 
FDCPA.

[¶20.]  In this instance, the county court ruled 
that CheckRite had failed to comply with 15 U.S.C. § 1692g because it had not 
received a verification or validation from the retail store that it could mail 
to Johnson. We agree with the county court that CheckRite failed to comply with 
this requirement of the FDCPA. The district court reversed the county court on 
this issue, noting that the statute does not specify what is required for 
verification, but does allude to the fact that obtaining a copy of a judgment 
will suffice. The district court concluded that possession of the original check 
was the equivalent of obtaining a copy of a judgment and, therefore, adequate 
verification had been accomplished. In our view, this construction is erroneous 
and, in any event, CheckRite made no attempt to comply with the mailing 
requirement. The burden is upon the debt collector to demand adequate 
verification so that it can comply with the mailing requirement of the statute. 
The failure to do so by CheckRite, in this instance, subjects it to the 
sanctions provided under 15 U.S.C. § 1692k.

[¶21.]  The next basis for liability raises the 
issue of whether CheckRite violated the provisions of 15 U.S.C. § 1692f(1) by 
attempting to collect more from Johnson than was permitted either by agreement 
or by law. The notice sent by CheckRite in the second instance demanded the 
amount of $293.15 if paid after January 8, 1988. That demand does violate the 
FDCPA in the absence of a contractual agreement creating the debt since no 
statutory authority permits such a claim. While the statute permits the doubling 
of the original amount of the check, the claimed payment is too high because it 
was more than double the amount of the check. CheckRite agrees that this is 
true, but defends its conduct as not a violation of the FDCPA by contending that 
the improper claim was the product of an inadvertent clerical error. CheckRite's 
theory was adopted by the district court in reversing the county 
court.

[¶22.]  The pertinent portion of the FDCPA 
provides:

"A debt collector may not 
use unfair or unconscionable means to collect or attempt to collect any debt. 
Without limiting the general application of the foregoing, the following conduct 
is in violation of this section:

"(1) The collection of 
any amount (including any interest, fee, charge, or expense incidental to the 
principal obligation) unless such amount is expressly authorized by the 
agreement creating the debt or permitted by law." 15 U.S.C. § 
1692f.

The concession 
by CheckRite that the demand encompassed an overcharge manifests a prima facie 
violation of the FDCPA. Costen, 558 F. Supp. 564. In submitting its argument 
that the overcharge was the result of an inadvertent clerical error, CheckRite 
invokes 15 U.S.C. § 1692j. This appears to be an incorrect citation because that 
provision of the FDCPA is not on point. This justification could fit under 15 
U.S.C. § 1692k(c) that provides:

"(c) Intent. A debt 
collector may not be held liable in any action brought under this subchapter if 
the debt collector shows by a preponderance of evidence that the violation was 
not intentional and resulted from a bona fide error notwithstanding the 
maintenance of procedures reasonably adapted to avoid any such 
error."

Baker, 677 F.2d 775. While CheckRite's explanation is plausible because the doubling of the 
amount of the check and the $15 service charge and the addition of the $3.17 in 
collection cost would equal the amount demanded, still CheckRite is not entitled 
to the relief provided in 15 U.S.C. § 1692k(c).

[¶23.]  The record is silent with respect to any 
procedures reasonably adopted by CheckRite to preclude just such an error. See 
Bingham, 505 F. Supp. 864. Carrigan v. Central Adjustment Bureau, Inc., 494 F. Supp. 824 (N.D.Ga. 1980), articulates the proposition that the collector is 
liable under the act without regard to whether the overcharge was intentional or 
not unless proper procedures to preclude the error are maintained. The 
suggestion by CheckRite that it is entitled to relief because there was no 
evidence that "this was other than a clerical error in spite of procedures to 
avoid such errors" is nothing more than an attempt to assign to Johnson the 
burden of proof. Title 15 U.S.C. § 1692k(c) establishes an affirmative defense, 
Carrigan, 494 F. Supp.  at 826, however, it is CheckRite that is charged with the 
burden of producing evidence to justify its invocation. That burden cannot 
properly be assigned to the plaintiff in an action such as this. Baker; Carlson 
v. Carlson and Citizens National Bank & Trust Company, 775 P.2d 478 
(Wyo. 1989). 
See Miller v. Badgley, 51 Wn. App. 285, 753 P.2d 530 (1988). See also DeCoria v. 
Red's Trailer Mart, Inc., 5 Wn. App. 892, 491 P.2d 241 (1971). CheckRite 
introduced no evidence concerning any procedures designed to avoid such a 
miscalculation, and it failed to carry the burden of proof. 
Baker.

[¶24.]  Continuing this argument, CheckRite also 
urges that the notice set out in full the pertinent portions of § 1-1-115, W.S. 
1977. Because of that, it contends the clerical errors should have been obvious 
to Johnson from a reading of the entire notice, and the implication that follows 
is that the FDCPA excuses the error since it should have been harmless. 
CheckRite urges the proposition that Johnson "expressed no deception or 
confusion whatever about the notice." Perhaps Johnson was perceptive enough not 
to be deceived by this notice, but CheckRite's argument demonstrates a type of 
abuse sought to be eliminated by the FDCPA. Furthermore, its contention ignores 
the rule that this act is to be construed to the benefit of the "least 
sophisticated debtor." Swanson, 869 F.2d 1222; Jeter v. Credit Bureau, Inc., 760 F.2d 1168 (11th Cir. 1985); Kimber v. Federal Finance Corporation, 668 F. Supp. 1480 (M.D.Ala. 1987). See Baker, 677 F.2d 775. See also Central Adjustment, 667 F. Supp. 370; Wright v. Credit Bureau of Georgia, Inc., 548 F. Supp. 591 
(N.D.Ga. 1982), reconsidered 555 F. Supp. 1005 (N.D.Ga. 1983). CheckRite's 
argument with respect to the impact upon Johnson is not material, and CheckRite 
has not chosen to address the impact of its notice upon the least sophisticated 
of debtors.

[¶25.]  To avoid this precise dilemma, Congress 
wisely chose to require debt collectors to regulate themselves by the 
maintenance of procedures adapted to avoid such errors as that demonstrated in 
this case. The creation of an exception on the ground that Johnson was not 
deceived would structure precedent that undoubtedly would be invoked by every 
other debt collection service in future actions. Instead of designing a rule of 
law, the court would create an unnecessary situation in which the consumers, the 
debt collectors, and the courts, on an ad hoc basis, would be forced to 
determine the impact in each individual circumstance. We do not perceive that as 
an appropriate development in this area of the law and, consequently, in the 
absence of evidence reflecting procedures designed to avoid such a 
miscalculation causing an impact upon the least sophisticated consumer, we 
conclude that the defense is not available to CheckRite. Because the district 
court accepted the inadvertence argument in reversing the county court, we 
overrule the district court's decision and reinstate the determination of the 
county court on this issue. We hold that CheckRite did violate the FDCPA in this 
respect. Baker; Carrigan, 494 F. Supp. 824.

[¶26.]  As an additional ground to justify 
recovery by Johnson, the county court found that CheckRite also violated the 
FDCPA by sending a demand letter directly to him after it had been advised that 
he was represented by counsel. The pertinent provision is 15 U.S.C. § 
1692c(a)(2) that provides:

     "(a) Communication 
with the consumer generally - Without the prior consent of the consumer given 
directly to the debt collector or the express permission of a court of competent 
jurisdiction, a debt collector may not communicate with a consumer in connection 
with the collection of any debt -

* * * * * 
*

"(2) if the debt 
collector knows the consumer is represented by an attorney with respect to such 
debt and has knowledge of, or can readily ascertain, such attorney's name and 
address, unless the attorney fails to respond within a reasonable period of time 
to a communication from the debt collector or unless the attorney consents to 
direct communication with the consumer; or * * *."

CheckRite admits 
that it sent an additional communication to Johnson after receiving the advice 
that he was represented by counsel. It justifies this action by invoking the 
requirements of § 1-1-115(b), W.S. 1977, requiring notice directly to the drawer 
of a dishonored check. Its argument is that the second communication is not the 
kind of communication contemplated by the FDCPA because it was a "formal" act. 
Its rationalization is that its second notice could never be served properly in 
accordance with the statute if sent to counsel because all the attorney would 
have to do to avoid service on his client would be to state that he is not 
authorized to receive service even though he represents the consumer concerning 
the debt. CheckRite contends that it was justified by these circumstances in its 
sending of the notice directly to Johnson.

[¶27.]  The FDCPA does not articulate any 
exception such as that urged by CheckRite. Compare Bieber, 631 F. Supp. 1410 
(continuing a short telephone conversation immediately after the collector was 
notified that the debtor was represented by an attorney held not a violation of 
the FDCPA). In order to comply with the FDCPA, the second notice should have 
been sent to Johnson's attorney. The communication directly with Johnson, under 
the circumstances, was an additional violation of the FDCPA. In this respect 
also, we reinstate the conclusion of the county court and overrule the district 
court's reversal.

[¶28.]  We now reach two contentions of Johnson 
adopted by the county court that we cannot support. The first of those is that 
CheckRite violated the provisions of 15 U.S.C. § 1692e(14) by sending an initial 
demand letter without advising him of its true name or that it was using a d/b/a 
name. The statutory provision is clear and provides:

"A debt collector may not 
use any false, deceptive, or misleading representations or means in connection 
with the collection of any debt. Without limiting the general application of the 
foregoing, the following conduct is a violation of this 
section:

* * * * * 
*

"(14) The use of any 
business, company or organization name other than the true name of the debt 
collector's business, company, or organization."

The 
uncontroverted testimony of the manager shows that Statewide Collections, Inc. 
was a franchisee of CheckRite, Ltd. and was licensed with the Wyoming State 
Collection Agency Board as Statewide Collections, Inc., d/b/a CheckRite. 
Consequently, "CheckRite" is a part of its true name for purposes of applying 
the FDCPA. There is no sound reason or statutory purpose that would mandate that 
it use its full and complete name in its communications and notices. It was 
using a true business name, and the name used does not exemplify a means likely 
to deceive or mislead the consumer. As the statute has been applied, even though 
a debt collector uses its true name, that name still may violate the FDCPA if it 
has a likelihood of deceiving or misleading the consumer. 15 U.S.C. § 1692e; 
Wright, 548 F. Supp. 591. The use of a name, even though truly and appropriately 
belonging to the collector, that either states or implies that the collector is 
something that in fact it is not is a clear violation of the spirit of the 
statute even though arguably within the letter of the law. If the name would 
cause the "least sophisticated consumer" to erroneously believe that the entity 
was a governmental agency or a law office, the use of the name could violate 
this provision even though it was the correct name for the debt collector. See 
Bingham, 505 F. Supp.  at 870.

[¶29.]  The second issue that we cannot support 
is the contention that a violation of 15 U.S.C. § 1692j and/or action in bad 
faith occurred because CheckRite failed to notify Johnson that it was no longer 
the true holder of the instrument allegedly creating the debt. This is the check 
on which payment had been stopped and which CheckRite had returned to the store. 
Johnson urges this deception to be contrary to the FDCPA, and he also invokes 
the Uniform Commercial Code, particularly §§ 34-21-101 to 34-21-1002, W.S. 1977. 
The FDCPA provision specifies:

"(a) It is unlawful to 
design, compile, and furnish any form knowing that such form would be used to 
create the false belief in a consumer that a person other than the creditor of 
such consumer is participating in the collection of or in an attempt to collect 
a debt such consumer allegedly owes such creditor, when in fact such person is 
not so participating." 15 U.S.C. § 1692j.

This section 
relates to the designing or furnishing of forms to create a false impression on 
the part of the consumer that some entity other than the creditor is 
participating in the collection of an alleged debt when that is not fact. The 
perceived evil the section avoids is a practice of furnishing false forms to 
creditors. These false forms often are furnished by a collection agency, usually 
printed in its own name or in the name of some actual or fictitious legal 
office. They then are used by the creditor who sends them directly to the 
consumer with the intent that the debtor would be intimidated into paying the 
debt. See Riveria, 682 F. Supp. 174; Bieber, 631 F. Supp. 1410; Central 
Adjustment, 667 F. Supp. 370. Because the entity does not actually participate, 
and there is no intention that it should, the collection fees are significantly 
less than using the services of the collection agency. Even though this saving 
of expense may inure to the benefit of the consumer, the problem arises because 
the creditor is not subject to the constraints of the FDCPA. Staub, 626 F.2d 275. This practice creates an opportunity for abuses that often are present, and 
15 U.S.C. § 1692j is designed to alleviate the problem by penalizing the 
third-party collector for furnishing the deceptive forms. Giving the widest 
range to this provision, it has no pertinency to the facts here. There never was 
any effort to create the impression that CheckRite was a "holder" of Johnson's 
check, and it always was obvious that it was collecting the account for the 
retail merchant. Therefore, this provision of the FDCPA cannot be 
invoked.

[¶30.]  Johnson has satisfied his burden and 
justified recovery under the FDCPA. It is not necessary to the disposition of 
this case that we consider the applicability of the cited provisions of the 
Uniform Commercial Code, and we do not address that 
argument.

[¶31.]  The final matter to be considered is the 
denial by the district court of attorney fees pursuant to § 1-1-115, W.S. 1977. 
Those attorney fees properly were awarded pursuant to the FDCPA, and Johnson has 
no need to rely upon the Wyoming statute for the purpose of obtaining 
attorney fees. Consequently, any ruling as to whether that statute is designed 
only for the benefit of a collection agency, and does not justify an award of 
attorney fees to consumers such as Johnson, has no pertinency here. We 
incorporate no ruling with respect to this issue.

[¶32.]  To summarize, we hold the district court 
properly did have jurisdiction to review the judgment of the county court 
entered under the Small Claims Act; CheckRite violated 15 U.S.C. § 1692g by 
failing to properly verify the alleged debt and to mail a copy of such 
verification to Johnson; CheckRite violated 15 U.S.C. § 1692f(2) by asserting an 
amount that it was not entitled to recover while failing to maintain procedures 
designed to preclude the assertion of such an overcharge; CheckRite violated 15 
U.S.C. § 1692c(a)(2) by contacting Johnson instead of Johnson's attorney. We 
rule that CheckRite did not violate the FDCPA by using the name CheckRite 
instead of Statewide Collections, Inc. in its communication to Johnson or by 
failing to advise Johnson that it had returned the dishonored check to the 
retail store. Furthermore, we conclude that a consideration of the application 
of the Uniform Commercial Code and of the scope of § 1-1-115, W.S. 1977, as it 
relates to attorney fees, are not pertinent to this 
appeal.

[¶33.]  We do sustain the ruling of the county 
court that Statewide Collections, Inc. violated the FDCPA in three respects, and 
the judgment in favor of Johnson was justified by these violations. The decision 
of the district court is reversed, and the judgment entered by the county court 
is affirmed and reinstated.

FOOTNOTES

1 The statute has since 
been amended to increase the maximum amount of small claims to $2,000. 
Ch. 19, S.L. Wyoming 
1989.

2 Because of the 
informality of the proceedings in small claims cases, it well may be that a 
district court would be presented with a record which would not accommodate to 
review because of its inadequacy. Such a circumstance clearly would justify the 
district court in dismissing the appeal in accordance with precedent from this 
court. Korkow v. Markle, 746 P.2d 434 (Wyo. 1987). Cf. Short v. Spring Creek Ranch, 
Inc., 731 P.2d 1195 (Wyo. 1987); Salt River 
Enterprises, Inc. v. Heiner, 663 P.2d 518 (Wyo. 
1983); Nix v. Chambers, 524 P.2d 589 (Wyo. 
1974); Wydisco, Inc. v. McMahon, 520 P.2d 218 (Wyo. 1974). The power of the district court to 
dismiss because of an inadequate record, however, is entirely different from a 
denial of jurisdiction to review.