A federal judge from the Eastern District of Illinois has certified a class action lawsuit against Midland Funding, Midland Credit Management, and Encore Capital for allegedly violating the Fair Debt Collection Practices Act after a plaintiff alleged those companies did not provide proper notification that the statute of limitations had expired.
The defendants had been arguing that the plaintiff failed to meet the requirements of Rule 23 in order to be the named plaintiff in the case.
A copy of the ruling in. Kevin Wheeler v. Midland Funding, Midland Credit Management, and Encore Capital can be accessed by clicking here.
Back in 2015, the plaintiff noticed that his credit report was being accessed by Midland Credit. When he first contacted the company, the plaintiff was offered a 40% discount to settle the debt. The next time he contacted the company, the plaintiff was directed to a website where he saw that the last payment made on the debt was back in 2009, that the debt had been charged off by the creditor in 2010, the 40% discount offer to settle the debt, and a notice that the defendant was not obligated to renew the settlement offer. The website made no mention of the fact that the statute of limitations on the debt had expired.
In alleging that the defendants “regularly attempt to collect debts from other debtors where the statute of limitations on the debt has expired,” a class-action lawsuit was filed.
According to the ruling, the defendant was seeking to certify the following class:
- all individuals with Illinois addresses
- who accessed the MCM web site
- and were offered a settlement or discount
- on a credit card debt on which the last payment had been made more than five-years prior to the accessing
- where the date of access was on or after a date one year prior to the filing of this action and on or before a date 21 days after the filing of this action.
The defendants argued that the plaintiff lacked standing to sue because he suffered no actual harm, because he failed to establish the commonality and predominance elements of Rule 23, because his claims do not meet the typicality and adequacy elements under Rule 23, and because the class claims are not superior to any potential individual claims.
The defendants had previously tried to have the case dismissed by arguing the plaintiff lacked standing, and, for the second time, the judge disagreed. Wrote Judge Virginia Kendall:
… the violation that Wheeler asserts here is precisely related to the underlying purpose of the FDCPA – protecting consumers from deceptive or misleading statements in connection with the collection of a debt – and he further identifies actual harm in that he was misled and confused by the Defendants’ website. Although there were no monetary damages, Wheeler still suffered an intangible injury that corresponds to the history and congressional intent underscoring the FDCPA protections.
Judge Kendall then proceeds to go through all of the Rule 23 requirements and details why Wheeler satisfies all of the standards in order to have the suit certified as a class action. The class could include up to 565 individuals, according to the ruling.