OLSEN v. CITI BANK LEGAL DEPT.

Filing 14

MEMORANDUM OPINION filed. Signed by Judge Michael A. Shipp on 11/16/2015. (eaj)

NOT FOR PUBLICATION
RECE~VED

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

ARNE EDWARD OLSEN,

NOV 1 7 2015

AT 8:30
W!LL!AM T. WALSH
CLERK

M

Plaintiff,
Civil Action No. 15-2190 (MAS) (LHG)

v.
MEMORANDUM OPINION
CITI BANK LEGAL DEPT.,
Defendant.

SHIPP, District Judge
This matter comes before the Court on Defendant Citibank, N .A.' s, improperly pied as Citi
Bank Legal Dept. ("Citibank"), motion to dismiss Plaintiff Arne Edward Olsen's ("Olsen")
Complaint for failure to state a claim pursuant Rule 12(b)(6) of the Federal Rules of Civil
Procedure. (ECF No. 6.) Olsen opposed the motion (ECF No. 12), and Citibank replied (ECF No.
13). The Court has carefully considered the parties' submissions and decides the matter without
oral argument pursuant to Local Civil Rule 78.1. For the reasons stated below, Citibank's motion
to dismiss is granted.

I.

Background
Olsen filed this action in the New Jersey Superior Count, Law Division, Special Civil Part,

following the Federal Trade Commission's ("FTC") investigation and prosecution of an internet
business opportunity scheme in which Olsen was defrauded. (Compl. Attach. I-A, 4-5, ECF No.
1-1.) Through this action, Olsen seeks protection as an "identity theft victim" for "unauthorized"
use of his Citibank credit card for purchases he made but from which he received "no benefit."
(Id at 1, 6.) In June and August of2012, Olsen was contacted by two online companies regarding

establishing an internet business that would produce short term results and develop into a
significant business. (Id. at 5.) Olsen invested money with Money Now Funding, or its affiliates,
for different services to setup his internet business. (Compl. Attach. II-A,

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2-4.) Specifically,

Olsen used his Citibank credit card in July, August, and October 2012 to make such purchases.
(Id

if 4; Compl. Attach. III-A.)

After learning of the fraud and the FTC action, Olsen submitted a

request for restitution in the FTC action. (See generally Compl. Attach. II-A.)
By correspondence dated November 12, 2013, Olsen notified Citibank that he disputed the
July, August, and October 2012 charges, in the approximate amount of $16,000. (Compl. Attach.
III-A.) Citibank responded, by correspondence dated November 21, 2013, stating that because
Olsen did not dispute the charges within sixty days of his billing statement that contained each
charge as required under the Truth in Lending Act, Citibank would not credit his account for the
charges. (Id)
Olsen filed his Complaint on February 23, 2015, and Citibank removed it to this Court on
March 27, 2015.

In his Complaint, Olsen asserts claims against Citibank under five different

laws: (1) Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p; (2) Truth in
Lending Act ("TILA"), 15 U.S.C. § 1601, and Regulation Z; (3) New Jersey Consumer Fraud Act
("NJCFA"), N.J.S.A. 56:8-1 to -80; (4) Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §1681;
and (5) FTC's Business Opportunity Rule ("BOR"), 16 C.F.R. Part 437. (See generally Compl.)
The thrust of Olsen's claim is that the charges he made using his Citibank credit card were
"unauthorized" because he did not receive a benefit, and thus, Citibank cannot impose liability for
the charges on him.

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II.

Legal Standard

Rule 8(a)(2) "requires only 'a short and plain statement of the claim showing that the
pleader is entitled to relief,' in order to give the defendant fair notice of what the ... claim is and
the grounds on which it rests." Bell At!. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). On a motion to dismiss for failure to state a claim, a
"defendant bears the burden of showing that no claim has been presented." Hedges v. United
States, 404 F.3d 744, 750 (3d Cir. 2005). Additionally, in determining the sufficiency of a pro se
complaint, the court must be mindful to accept its factual allegations as true and to construe it
liberally in favor of the plaintiff. See Haines v. Kerner, 404 U.S. 519, 520-21 (1972); James v.
City of Wilkes-Barre, 700 F.3d 675, 679 (3d Cir. 2012). The "[c]ourt need not, however, credit a
prose plaintiffs 'bald assertions' or 'legal conclusions."' D'Agostino v. CECOM RDEC, No. 104558, 2010 WL 3719623, at *1 (D.N.J. Sept. 10, 2010).
A district court conducts a three-part analysis when considering a Rule l 2(b)(6) motion.
Malleus v. George, 641 F.3d 560, 563 (3d Cit. 2011). "First, the court must 'tak[e] note of the
elements a plaintiff must plead to state a claim."' Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675
(2009)). Second, the court must accept as true all of a plaintifrs well-pleaded factual allegations
and construe the complaint in the light most favorable to the plaintiff. Fowler v. UPMC Shadyside,
578 F.3d 203, 210-11 (3d Cir. 2009).

The court, however, must disregard any conclusory

allegations proffered in the complaint.

Id.

Finally, once the well-pleaded facts have been

identified and the conclusory allegations ignored, a court must next "determine whether the facts
alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief."'
Fowler, 578 F.3d at 211 (quoting Iqbal, 556 U.S. at 679). During this last step, the court may
consider documents attached to the complaint or explicitly referenced in the complaint. See In re

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Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997) (holding that "any
document integral to or explicitly relied upon in the complaint" may be considered "without
converting the motion [to dismiss] into one for summary judgment").

III.

Analysis
A.

Fair Debt Collection Practices Act

Olsen alleges that Citibank violated section 805(c) of the FDCPA by calling him 235 times
after he sent a cease and desist letter. (Compl., Br. Statement of Pl. 's Claims.) Citibank argues
that Olsen's FDCP A claim fails as a matter of law because the FDCPA only applies to debt
collectors and Citibank is a creditor. (Def.'s Moving Br. 5-6, ECF No. 6-1.) In response, Olsen
states that "Citibank N.A. claims not to be a bill collector, but while not a bill collector for [Money
Now Funding], Cardmember Services is requesting payment of charges that originate from a
fraudulent source." (Pl.'s Opp'n Br. 3, ECF No. 12.)
The FDCPA distinguishes between "debt collectors" and "creditors." See 15 U.S.C.
§ 1692a(4), (6). Under the FDCPA, a "debt collector" is broadly 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, ot who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another." § 1692a(6). The FDCPA
defines a creditor as "any .person who offers or extends credit creating a debt or to whom a debt is
owed." § 1692a(4). "The Third Circuit distinguishes between 'creditors' and 'debt collectors'
under FDCPA, explaining that '[t]he FDCPA's provisions generally apply only to debt
collectors."' Cooper v. Pressler & Pressler, LLP, 912 F. Supp. 2d 178, 183-84 (D.N.J. 2012)
(quoting Schaffhauser v. Citibank (S.D.) N.A., 340 F. App'x 128, 130 n.4 (2009)). "Creditors-as
opposed to 'debt collectors'-generally are not subject to the FDCPA." Pollice v. Nat'! Tax

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Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000) (citing Aubert v. Am. Gen. Fin., Inc., 137 F.3d
976, 978 (7th Cir. 1998) ("Creditors who collect in their own name and whose principal business
is not debt collection ... are not subject to the Act. ... Because creditors are generally presumed
to restrain their abusive collection practices out of a desire to protect their corporate goodwill, their
debt collection activities are not subject to the Act unless they collect under a name other than their
own.")).
Citibank is not a debt collector for purposes of the FDCPA. Olsen alleges that Citibank,
or its representative, called him regarding the balance on his account. Based on these allegations,
Citibank is a creditor who extends credit creating a debt and, as such, is allowed to collect that
debt under its own name without being subject to the FDCPA. Construing the allegations in the
Complaint as true and viewing them in the light most favorable to Olsen, his Complaint does not
allege facts sufficient to demonstrate that Citibank meets the definition of a debt collector under
the FDCPA. Accordingly, Olsen's FDCPA claim is dismissed with prejudice as permitting
amendment would be futile given Citibank's status as a creditor not subject to the FDCPA.

B.

Truth in Lending Act

Olsen alleges that the TILA shields him from liability for the "unauthorized use" of his
credit card in relation to the purchases he made through Money Now Funding and its affiliates.
Citibank argues that Olsen's claim under the TILA fails as a matter of law because he authorized
the transaction. (Def.'s Moving Br. 8-9.) In response, Olsen asserts that the use was unauthorized
because he did not receive a benefit and "breach of the merchant-consumer relationship is an unfair
practice that requires the card holder to assert claims against the card issuer, in order to reach any
satisfaction or protection from fraud." (Pl. 's Opp'n Br. 8-9.)

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Section 1643 of the TILA "limits the liability of cardholders, under certain circumstances,
to a maximum of $50 for unauthorized charges." Sovereign Bank v. BJ's Wholesale Club, Inc.,
533 F.3d 162, 175 (3d Cir. 2008). The TILA defines "unauthorized use" as the "use of a credit
card by a person other than the cardholder who does not have actual, implied, or apparent authority
for such use and from which the cardholder receives no benefit." 15 U.S.C. § 1602(p) (emphasis
added). Here, Olsen admits in his complaint that he made the transactions in question, but argues
that at the time he made the transactions he did not know of the fraud Money Now Funding was
perpetrating. The conduct Olsen alleges does not fit within the definition of "unauthorized use"
as he personally made the transactions. Additionally, Olsen has not provided, and this Court
cannot independently find, any authority for extending the definition of unauthorized use to the set
of facts Olsen has alleged. Olsen is asking this Court to "save [him] from [himself]" and "impose
a duty on banks to act not as self-interested, adversarial business partners, but to act as paternalistic
friends, who will tell borrowers when they risk peril." Jatras v. Bank ofAm. Corp., No. 09-3107,
2010 WL 1644407, at *4 (D.N.J. Apr. 22, 2010). The Court will not extend the bounds of the
TILA on these facts. Accordingly, Olsen's TILA claim is dismissed with prejudice as permitting
amendment would be futile.
C.

New Jersey Consumer Fraud Act

Olsen alleges that Citibank violated sections 56:8-1 and 56:8-2 of the NJCFA without
providing any additional allegations. Citibank argues that Olsen's claim under the NJCFA fails as
a matter of law because no omission, misrepresentation, or statutory violation occurred in
connection with the sale or advertisement of merchandise. (Def.' s Moving Br. 7.) In response,
Olsen argues that he is not alleging a misrepresentation or omission on the part of Citibank, but
instead seeks to hold Citibank liable for the fraud committed by Money Now Funding: "As a

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consumer bewildered by the intensive and coordinated assault indulged in by [Money Now
Funding], how this group of individuals was able to remain an entirely valid business proposition,
is perhaps, promulgated by the interest debt created and benefiting Citibank." (Pl.'s Opp'n Br. 67.)
To state a claim under the NJCFA a plaintiff must show "(1) unlawful conduct by the
defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship
between the unlawful conduct and the ascertainable loss." Jatras, 2010 WL 1644407, at *5. Olsen
seeks to hold Citibank responsible for the fraud that was committed against him by Money Now
Funding based on an assignor/assignee relationship. (Pl.'s Opp'n Br. 6-7.) Olsen, however, has
not pied, nor provided support for, any such relationship between Citibank and Money Now
Funding.

Accordingly, Olsen's NJCFA claim is dismissed with prejudice as permitting

amendment would be futile.

D.

Fair Credit Reporting Act

Olsen alleges that he is a victim of identity theft and is entitled to the protections of section
605(c) of the FCRA, specifically the continued collection of debts that result from identity theft.
Citibank argues that Olsen's claim under the FCRA fails as a matter oflaw because§ 1681s-2(a)
does not create a private right of action and Olsen fails to plead sufficient facts to state a claim
under §1681s-2(b). (Def.'s Moving Br. 9-10.) In response, Olsen argues that under§ 1681s-2,
Citibank failed to verify the charges on Olsen's account.
Olsen's claim under the FCRA fails as: (1) there is no private right of action under§ 1681s2(a), see Simmsparris v. Countrywide Fin Corp., 652 F.3d 355, 358 (3d Cir. 2011); and (2) the
duties imposed by § 1681s-2(b) apply only where "a creditor [is] notified by a credit reporting
agency that a consumer has disputed information furnished by that creditor," Barker v. Capitol

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One Bank (USA), NA., No. 12-971, 2012 WL 5930094, at *2 (S.D. Ind. Nov. 26, 2012). Here,
Olsen clearly alleges in his Complaint and the attached documents that he sent correspondence to
Citibank requesting documentation and proof of the validity of the subject charges on his account.
Olsen does not allege that he disputed the information with a credit reporting agency or that a
credit reporting agency notified Citibank. (Compl., Attach. 111-B.) Accordingly, Olsen's CRA
claim is dismissed with prejudice as permitting amend111ent would be futile.

E.

Business Opportunity Rule

Olsen alleges that _Citibank is liable under the BOR as a "representative" of Money Now
Funding because Money Now Funding misrepresented how much money Olsen could make.
Citibank argues that Olsen's claim under the BOR fails as a matter of law because Citibank is not
a seller under 16 C.F.R. § 437.1 of the BOR. (Def.'s Moving Br. 11-12.) In response, Olsen
argues that the BOR applied to Citibank "indirectly" without providing any further justification.
(Pl.'s Opp'n Br. 10.)
The BOR establishes certain disclosures a "seller" must make "[i]n connection with the
offer for sale, sale, or promotion of a business opportunity." 16 C.F.R. §§ 437.2 to -.3. A seller is
defined as "a person who offers for sale or sells a business opportunity." § 437.l(q). Olsen does
not allege that Citibank is a seller under the BOR. Additionally, Olsen does not provide any

support for finding that the BOR should apply to Citibank "indirectly" or as a "representative" of
Money Now Funding. Accordingly, Olsen's BOR claim is dismissed with prejudice as permitting
amendment would be futile.

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IV.

Conclusfon
For the reasons set forth above, Citibank's motion to dismiss is granted.

An order

consistent with this Memorandum Opinion will be entered.

UNITED STATES DISTRICT JUDGE

Dated: November ~~O 15

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