District Court Holds Letter Notifying Debtor of Change in Debt Ownership Can Fall Under FDCPA


On October 5, 2020, the U.S. District Court for the Middle District of Florida denied a debt collector’s motion for summary judgment, holding that a letter which provides notice of a change in debt ownership and requests payments be remitted to the new owner qualifies as a communication related to a debt under the Fair Debt Collection Practices Act (“FDCPA”), which restricts how debt collectors can collect from debtors.

Axiom Acquisition Ventures, LLC (“Axiom”) bought Robert Valenzuela’s consumer debt from a bank after he allegedly defaulted on his personal loan payments. Axiom sent Valenzuela a letter informing him that his debt had been reassigned and instructing him to remit future payments to Axiom.

Valenzuela brought suit, alleging that the letter violated the FDCPA because it (1) did not inform him of his right to dispute the debt; (2) misled him as to the chain of ownership of the debt; and (3) concealed Axiom’s status as a debt collector. Axiom moved for summary judgment, arguing that the letter was not a communication “in connection with the collection of a debt” subject to the FDCPA, only notice of the change in his debt’s ownership.

The District Court denied Axiom’s motion, applying precedent from the U.S. Court of Appeals for the Eleventh Circuit, that a communication from a debt collector can have dual purposes, such as giving notice and demanding payment. The Court found that true here, concluding that the letter was a communication in connection with the collection of a debt because in addition to notifying Valenzuela about the change in ownership, it “also includes specific language urging Plaintiff to immediately remit future payments” to Axiom. The Court noted that had this language not been included, the outcome may have been different.