Lawyer liable for debt collection violations.

• Author: Sanders, Carol McHugh

A Virginia lawyer who sent dunning letters to Illinois residents to collect on delinquent accounts for a large credit card company is liable under the federal debt collection laws because he did little more than lend his name and firm letterhead to the company's collection effort, the Seventh Circuit held in Nielsen v. Dickerson, 307 F.3d 6223 (7th Cir. 2002).

The court affirmed the trial court's summary judgment in favor of a class of debtors who alleged that David D. Dickerson, a Virginia-licensed attorney, violated the Fair Debt Collection Practices Act (FDCPA). Each class member had been a GM credit card holder who had received a letter on Dickerson's law firm letterhead between September 22, 1997, and July 15, 1999, about his or her delinquent account. The district court determined that Dickerson's minimal involvement in preparing the letters rendered them misleading in violation of Section 1692e(3) of the FDCPA. 1999 U.S.Dist. Lexis 13931.

The letters, the district court ruled, falsely implied to the debtor that an attorney had become professionally involved in the collection, violating Section 1692e(10)'s ban on using any false representation or deceptive means in collecting a debt. After the district court granted summary judgment on liability, the parties reached a settlement that reserved the defendants' right to appeal the liability ruling.

Dickerson argued on appeal that he was meaningfully involved in sending out the delinquency letters. Household Bank, which had issued the GM cards, sent Dickerson a list of about 2,000 debtors each month, for which he was paid $2.45 per account. He pointed out on appeal that he briefly reviewed the data printouts from Household each month. His staff also checked the firm's database to see if the account holder's name showed up among recent bankruptcy court filings and to determine if the firm had already sent a letter to that person. The firm's staff also checked the debtors' addresses to be sure no one resided in one of three states that prohibited the type of letter Dickerson intended to send.

After the firm completed its three-part review, the data was turned over to a bulk mailing facility to send out on the firm's letterhead with a facsimile of Dickerson's signature. The letters advised the debtors to contact Household about the delinquency and make payments directly to GM card. If a debtor contacted Dickerson's office by mail, that letter was forwarded to Household. Telephone calls from...