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PostPosted: Wed Jan 31, 2007 4:03 am 
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Michael Charles v. Credit Bureau Services, Civ Act. No. 99-1505 Section, E/3, United States District Court for the Eastern District of Louisiana, 1999 U.S. Dist. LEXIS 19577 (December 15, 1999)

Plaintiff sued Credit Bureau Services, a debt collection entity which was allegedly violating the Fair Debt Collection Practices Act by representing that it was a "credit bureau" and thereafter denying that it was a "credit bureau" and by alleging by sending deceptive letters to the plaintiff. The Court granted the defendants Motion for Summary Judgment. The Court found that it was permissible for an entity to operate both as a consumer reporting agency and as a debt collection agency. In essence, the company did not deceive or mislead consumers in violation of 1692(e) of the Fair Debt Collection Practices Act. In support of its ruling that an entity may use the name "credit bureau" and operate as both a credit reporting agency and a debt collection agency, the Court cited the following the following cases: Byes v. Credit Bureau Enterprises, Inc., 1996 U.S. Dist. LEXIS 2870, 1996 WL 99360 (Mentz, J.) (E.D. La. 1996); Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 598 (N.D. Ga. 1982), on reconsideration, 555 F.Supp. 1005 (N.D. Ga. 1983), overruled on other grounds, 760 F.2d 1168, 1174 n. 6 (11th Cir. 1985); Catherman v. Credit Bureau of Greater Harrisburg, 634 F.Supp. 693, 695 (E.D. Pa. 1986). The Court went on to recite that it is a "widely known fact that failure to pay debts that are owed might adversely affect ones credit rating and ability to obtain credit." The Court cited Wright, supra, at 1007; Harvey v. United Adjusters, 509 F.Supp. 1218, 1221 (U.S.D.C. Ore 1981). The Court found that the debt collection letters sent to plaintiff in this case did not threaten any action but merely stated the widely know fact that failing to pay ones debt would affect their credit rating and ability to obtain credit. The Court found that such a non-threatening statement was not abusive, deceptive or threatening. Further, the Court found that it would not mislead the "least sophisticated consumer."

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David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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