Eleventh Circuit Reverses Dismissal of FDCPA Claim Involving MERS

FDCPA Mortgage Servicing

On March 30, the Eleventh Circuit Court of Appeals reversed the dismissal of a FDCPA claim stemming from a communication to the plaintiff that erroneously identified MERS Corp. as the plaintiff’s creditor.  Shoup v. McCurdy & Candler LLC, No. 10-14619, 2012 WL 1071196 (11th Cir. Mar. 30, 2012). The plaintiff obtained a mortgage from America Wholesale Lender.  MERS was the grantee acting as the lender’s nominee under the mortgage contract.  After the plaintiff defaulted, MERS’s law firm sent an initial communication letter described as an attempt to collect a debt and identifying MERS as the “creditor on the above referenced loan.”  The mortgagee filed suit under the FDCPA, alleging that MERS is not a creditor and that by falsely stating so, the law firm committed a FDCPA violation.  The district court granted the defendant law firm’s 12(b)(6) motion to dismiss, concluding that MERS was a creditor and that even if it was not, the purported violation was harmless.  In its reversal, the Eleventh Circuit reasoned that the FDCPA makes clear that (i) “any false representation” in the collection of a debt is a violation of the statute, (ii) a “creditor” under the statute would not include MERS in this instance, because MERS was not owed a debt, and (iii) any failure to comply with the law subjects the violator to actual and statutory damages.