National Financial Services Inc a debt collection agency that serves
National Financial Services, Inc., a debt collection agency that serves magazine subscriptions clearinghouses, handled roughly 2.2 million accounts during 1986 and 1987. It sent letters to debtors whose accounts were delinquent. The average unpaid balance owed on these accounts was approximately $20. One letter sent by National Financial to a large number of debtors stated that their account "Will Be Transferred To An Attorney If It Is Unpaid After The Deadline Date!!!" Debtors who did not pay after receiving this letter received one or more letters that bore the letterhead of "N. Frank Lanocha, Attorney at Law." Lanocha prepared the text of these form letters and gave copies to National Financial's president, Smith. Smith then arranged for the letters to be prepared and mailed out. One of these letters contained the following statements: "Please Note I Am The Collection Attorney Who Represents American Family Publishers. I Have The Authority To See That Suit Is Filed Against You In This Matter." The letter also stated: "Unless This Payment Is Received In This Office Within Five Days Of The Date Of This Notice, I Will Be Compelled To Consider The Use Of The Legal Remedies That May Be Available To Effect Collection." The Federal Trade Commission sued National Financial, Smith, and Lanocha, alleging violations of the Fair Debt Collection Practices Act. How should the court rule?

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