1

United States Court of Appeals,

Fifth Circuit.

No. 96-30826.

Bobby B. McKENZIE, Plaintiff-Appellant,

v.

E.A. UFFMAN AND ASSOCIATES, INC., doing business as Credit Bureau

of BR, Defendant-Appellee.

Aug. 14, 1997.

Appeal from the United States District Court for the Middle

District of Louisiana.

Before WISDOM, DUHÉ and BARKSDALE, Circuit Judges.

WISDOM, Circuit Judge:

In this case we review the district court's determination that

a certain collection notice did not violate § 1692 of the Fair Debt

Collection Practices Act. Because we disagree with the district

court's conclusion, we reverse the district court's grant of the

defendant's motion for summary judgment and remand the case for

further proceedings.

BACKGROUND:

Bobby McKenzie, a Louisiana resident, filed a complaint

against E.A. Uffman & Associates, Inc. ("E.A.Uffman"), under the

Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692.

McKenzie alleged that in October 1994, E.A. Uffman mailed him a

debt-collection notice (the "McKenzie notice"), which bore the name

"Collections Department, Credit Bureau of Baton Rouge" and
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requested payment of a $244 medical debt allegedly owed to

"Anesthesiology Group". McKenzie asserted that, because E.A.

Uffman neither "operated" nor "was employed by" a credit-reporting

agency, the use of the name "Credit Bureau" was a misrepresentation

in violation of § 1692e(16). McKenzie sought damages and

attorney's fees.

E.A. Uffman moved for summary judgment and submitted in

support documentary evidence and a deposition of Glenn Uffman, E.A.

Uffman's President. E.A. Uffman argued that it had been

"affiliated" with the Credit Bureau of Baton Rouge ("Credit

Bureau") for decades and that its use of the name "Credit Bureau"

on debt-collection notices was not deceptive or misleading. E.A.

Uffman asserted that since 1948 it had an uninterrupted

"relationship" with the Credit Bureau by which E.A. Uffman acted as

the Credit Bureau's collection department.

The district court granted E.A. Uffman's summary-judgment

motion and dismissed the case. The court found that E.A. Uffman's

use of the name "Collections Department, Credit Bureau of Baton

Rouge" on the McKenzie notice was "not deceptive or misleading

because there is an affiliation between the two entities".

Adopting a standard from other courts, the district court ruled

that even the "least sophisticated consumer" could discern from the

McKenzie notice that E.A. Uffman did not represent itself to be a

credit-reporting agency and that it was seeking only to collect a

debt, not threaten McKenzie's credit rating. McKenzie timely filed
 

1Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.1992). 

 

2§ 1692(e); Taylor v. Perrin, Landry, deLaunay & Durand,

103 F.3d 1232, 1234 (5th Cir.1997). 

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a notice of appeal.

DISCUSSION:

This court reviews the district court's grant of summary

judgment de novo.1 McKenzie argues that the district court's grant

of the defendant's motion for summary judgment was error because

the evidence showed that E.A. Uffman neither "operate[d]" nor was

"employed by" a credit reporting agency. McKenzie asserts that

E.A. Uffman's use of the name "Collections Department, Credit

Bureau of Baton Rouge" is false and misleading as it clearly

implies that such a relationship exists.

The FDCPA is designed "to eliminate abusive debt collection

practices by debt collectors, to insure that those debt collectors

who refrain from using abusive debt collection practices are not

competitively disadvantaged, and to promote consistent State action

to protect consumers against debt collection abuses".

2 The FDCPA

applies primarily to "debt collectors," defined as "any person who

uses any instrumentality of interstate commerce or the mails in any

business, the principal purpose of which is the collection of any

debts, or who regularly collects or attempts to collect, directly

or indirectly, debts owed or due or asserted to be owed or due
 

3§ 1602a(6); Taylor, 103 F.3d at 1234. 

 

4Taylor, 103 F.3d at 1234; see § 1692e. 

 

5§ 1692e(16) (emphasis added). 

 

6§ 1681a(f). 

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another".3 It is undisputed that E.A. Uffman is a "debt collector"

within the meaning of the Act.

"The FDCPA prohibits debt collectors from, inter alia, using

any false, deceptive, or misleading representation or means in

connection with the collection of any debt."4 "The false

representation or implication that a debt collector operates or is

employed by a consumer reporting agency" violates the FDCPA.5 A

"consumer reporting agency" is "any person which, for monetary fees

... regularly engages in whole or in part in the practice of

assembling or evaluating consumer credit information or other

information on consumers for the purpose of furnishing consumer

reports to third parties...."6 It is undisputed that the Credit

Bureau is a "consumer reporting agency" within the meaning of the

Act.

The relevant evidence adduced in support of the parties'

summary-judgment motions may be summarized as follows: The

McKenzie notice contained scant information. It indicated, in bold

print at the top of the notice, that the debt collector was the

"Collection Department, Credit Bureau of Baton Rouge" and stated:

THIS ACCOUNT HAS BEEN LISTED WITH THIS OFFICE FOR IMMEDIATE

COLLECTION. THIS NOTICE HAS BEEN SENT TO YOU BY THIS
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COLLECTION AGENCY. THIS IS AN ATTEMPT TO COLLECT A DEBT AND

ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. IF

PAID IN FULL TO THIS OFFICE ALL COLLECTION ACTIVITY WILL BE

STOPPED.

In his deposition, Glenn Uffman testified that in 1948 his

father, Elmer Uffman, had signed an agreement with the Credit

Bureau by which he would operate the Credit Bureau's collection

department. Elmer Uffman had been hired as the Executive Vice

President or General Manager of the Credit Bureau and had

discovered that it had an inactive collection department. The

Credit Bureau accepted Elmer Uffman's offer to run the department.

Through the 1948 agreement, the Credit Bureau leased to Elmer

Uffman the name "Credit Bureau of Baton Rouge" and assigned to him

all of its collection business. In return, the Credit Bureau would

provide Elmer Uffman credit reports free of charge.

In 1957, Glenn Uffman began working for Elmer Uffman, who was

doing business as "the Collection Department, Credit Bureau of

Baton Rouge" and operating as a sole proprietorship. In 1989,

Glenn Uffman incorporated the business as E.A. Uffman; Glenn

Uffman was President and Secretary/Treasurer. As of 1994, E.A.

Uffman continued to lease and do business under the name

"Collection Department, Credit Bureau of Baton Rouge" and it

remained in the "debt collection business". E.A. Uffman did not

use the name E.A. Uffman for "trade purposes". It had registered

with the Louisiana Secretary of State under the trade name

"Collection Department, Credit Bureau of Baton Rouge." In the
 

7634 F.Supp. 693 (E.D.Pa.1986). 

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white pages of the telephone book, E.A. Uffman was listed as the

Collection Department for the Credit Bureau.

The "shareholders" of the Credit Bureau were local merchants.

The Credit Bureau was in the business of furnishing consumer credit

reports. In return for the lease of the name "Credit Bureau", E.A.

Uffman paid the Credit Bureau five percent of its debt-collection

commissions. E.A. Uffman was not involved in preparing consumer

credit reports.

No one associated with the Credit Bureau supervised any of

E.A. Uffman's 23 employees or had the power to discharge or

discipline them. The Credit Bureau did not compensate or provide

benefits to E.A. Uffman employees. There are no shared employees.

Since E.A. Uffman's incorporation in 1989, the Credit Bureau had

not referred any collection accounts to E.A. Uffman. E.A. Uffman's

place of business was in the Credit Bureau's building, where it

leased office space from the Credit Bureau.

Clearly, E.A. Uffman does not operate a credit reporting

agency. E.A. Uffman argues that it has not violated § 1692e(16)

because it is "employed by" the Credit Bureau as the Credit

Bureau's "Collection Department". E.A. Uffman relies on two

district court cases to support its position.

In Catherman v. Credit Bureau of Greater Harrisburg,7 the

court held that the defendant, a credit bureau with both reporting
 

8Id. at 694-95. 

 

9Id. at 695. 

 

10Id. at 695-96. 

 

11555 F.Supp. 1005 (N.D.Ga.1983). 

 

12Id. at 1006. 

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and collection divisions, had not violated § 1692f when its two

collection notices to the plaintiff consumer suggested that she

might endanger her credit rating if she did not immediately pay her

debt.8 The court concluded that the defendant had not

misrepresented itself as a credit reporting agency under § 1692e,

because the defendant did operate a credit-reporting division.9

The court ruled that the effect of the collection notices was not

"false, deceptive, unfair or unconscionable", because the notices

only reminded her—quite accurately—that "if the past debt is not

paid there is likely to be an adverse effect upon a future ability

to obtain credit".10

In Wright v. Credit Bureau of Georgia,11 the defendant was a

credit bureau that also acted as a debt-collection service. The

district court held that the defendant had not violated § 1692e

through the "prominent use" in its collection notices of its

identity as a credit bureau.12 The court reasoned:

Although the use of the term "credit bureau' may indeed cause

a consumer to conclude that CBI is a credit reporting agency

capable of affecting the consumer's credit rating, the text of

each letter sent by the defendants and the appearance of the

name "CBI COLLECTIONS' at the bottom of each letter and on the
 

13Id. at 1007. 

 

14Taylor, 103 F.3d at 1236. 

 

15Id. 

 

16Id. 

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return envelope sufficiently inform[ed] the consumer that he

ha[d] received only a dunning letter and not a threat to relay

credit information to a credit reporting agency.... [T]he

letters convey no specific threat greater than the well-known

fact ... that a failure to pay one's bills will affect his

ability to obtain credit in the future....13

Assuming those cases are correctly decided, both Catherman and

Wright are distinguishable from the instant case. In each of those

cases, the credit bureau itself indisputably operated a debt

collection service. In this case, the relationship between the

Credit Bureau and E.A. Uffman is far more tenuous.

In Taylor, this court observed that "the most widely accepted

tests for determining whether a collection letter contains false,

deceptive, or misleading representations are objective standards

based on the concepts of the "least sophisticated consumer' or the

"unsophisticated consumer' ".14 "[T]he debt collector's

representations, notices and communications to the consumer must be

viewed objectively from the standpoint" of either the "least

sophisticated consumer' or an "unsophisticated consumer'."15 In

Taylor, this court declined to adopt a specific standard because

the collection letter sent in that case was "deceptive and

misleading under either standard".16
 

1715 U.S.C. § 1692; Taylor v. Perrin, Landry, deLaunay &

Durand, 103 F.3d 1232, 1234 (5th Cir.1997). 

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Here, again, we decline to adopt a specific standard.

Clearly, under either standard, the McKenzie notice represents or

implies that the debt collector is employed by a credit reporting

agency. In fact, the name does more than that, the name implies

that the debt collector is a department within the Credit Bureau

itself. Though the language of the notice refers to "this office"

and "this collection agency", neither an "unsophisticated consumer"

nor the "least sophisticated consumer" would discern from this

language that the debt collector is actually a wholly distinct

entity from the Credit Bureau.

E.A. Uffman contends that the long-time "affiliation" between

E.A. Uffman and the Credit Bureau legitimizes the McKenzie notice.

Examination of the facts reveals, however, that their "affiliation"

is far more tenuous than the relationships contemplated by Congress

in § 1692e(16). E.A. Uffman does not operate the Credit Bureau and

is not employed by the Credit Bureau. Essentially, E.A. Uffman has

licensed the use of the name "COLLECTION DEPARTMENT, CREDIT BUREAU

OF BATON ROUGE" for a five percent royalty on every collection.

Undoubtedly, E.A. Uffman enjoys a competitive advantage over

collection agencies with less imposing letterheads. In drafting

the FDCPA, Congress intended "to insure that those debt collectors

who refrain from using abusive debt collection practices are not

competitively disadvantaged".17 We cannot permit the naked license
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of a credit bureau's name to circumvent the policies of the FDCPA

and the specific prohibition of § 1692e(16). The district court's

grant of the defendant's motion for summary judgment was error.

Accordingly, the district court's order granting the

defendant's motion for summary judgment is REVERSED and this case

is REMANDED for further proceedings.