A federal judge in Michigan has denied a defendant’s motion to dismiss a lawsuit alleging it violated the Fair Debt Collection Practices Act by making misleading statements to the plaintiff and by negotiating a potential settlement with the plaintiff’s spouse without the plaintiff’s knowledge.
A copy of the ruling in Brown v. Alltran Financial, LP can be accessed by clicking here.
The plaintiff had incurred a debt with a creditor, which was placed for collection with the defendant. The defendant contacted the plaintiff’s spouse, who was not liable for the debt. However, during the conversation, the defendant allegedly implied that the spouse was liable and represented that the spouse could negotiate a settlement on the plaintiff’s behalf. The offer was not accepted by the spouse. The defendant subsequently sent an email to the spouse which contained an attachment notifying the spouse that the defendant had accepted a settlement offer from the plaintiff. The spouse was provided a password to access the attachment, but the defendant did not provide a password to the plaintiff. When contacted by the plaintiff, the defendant allegedly misrepresented that it was legal in Michigan to negotiate with a spouse, that the spouse had made a settlement offer which had been accepted, and that the plaintiff had to pay the balance.
The plaintiff then filed suit, alleging the defendant had violated Sections 1692e(2), 1692e(10), and 1692f(1) of the FDCPA, which prohibit the use of false or deceptive means in an attempt to collect on a debt.
The defendant argued that the plaintiff failed to state a claim, lacked standing to file suit on behalf of her spouse, and that the defendant did not violate the FDCPA by negotiating with the spouse.
In denying the motion to dismiss, the judge did rule that the plaintiff can not recover for any of the alleged statements made to the spouse, but could recover for the statements that the defendant made to her.
The judge did rule that the plaintiff had plausibly stated a claim under the FDCPA with respect to the alleged falsehoods that were told to her — that her spouse had made an offer which had been accepted and that he had bound the plaintiff to make the payment. The defendant argued that the statements were not material, but that assumed facts that were not included in the complaint. Thus, the judge denied the motion to dismiss.