Not Explicitly Stating Dispute Has to be Filed in Writing Does Not Rise to Level of FDCPA Violation, Appeals Court Rules

The Seventh Circuit Court of Appeals ruled yesterday that the oversight of not mentioning in a collection letter that disputing a debt had to be made in writing does not rise to the level of suffering an injury under the Fair Debt Collection Practices Act and affirmed a lower court’s dismissal of a lawsuit against a collection agency.

A copy of the ruling in the case of Casillas v. Madison Avenue Associates, Inc., can be accessed by clicking here.

The plaintiff received a collection letter from the defendant. The letter included the statutory language from the FDCPA regarding how a consumer can dispute a debt, but failed to mention the dispute had to be filed in writing. The plaintiff filed suit, alleging the letter violated the FDCPA. A District Court judge dismissed the suit, which was appealed to the Seventh Circuit.

“The bottom line of our opinion can be succinctly stated: no harm, no foul,” the Seventh Circuit wrote in its opinion.

A procedural injury under a consumer protection statute is insufficient to confer standing, the Seventh Circuit wrote. The plaintiff had no more use for the validation notice “than she would have had for directions accompanying a product that she had no plans to assemble.”

The plaintiff only complained that “her notice was missing some information that she did not suggest that she would ever have used,” the Seventh Circuit wrote in its ruling.

The ruling from the Seventh Circuit creates a split at the Appellate Court level on whether not explicitly stating that a dispute notice needs to be made in writing constitutes a violation of the FDCPA. Because of that, the Seventh Circuit’s ruling was circulated amongst all of the court’s judges, but a majority of them declined to hold an en banc hearing. However, Judge Diane Pamela Wood, the Seventh Circuit’s Chief Judge, along with two other Circuit Court judges, wrote a dissenting opinion about the decision not to hold an en banc hearing.

“The panel’s opinion will make it much more difficult for consumers to enforce the protections against abusive debt collection practices that Congress conferred in the Act,” Judge Wood wrote. “That alone is troublesome. But what troubles me even more is the light this case shines on the need for a clear test in this circuit to distinguish between statutory protections that create, on the one hand, a ‘bare procedural injury’ that does not support standing, and, on the other hand, statutory protections for the type of concrete, particularized, and actual or imminent injury that meet Article III standards. In my view, the rejection of standing in the case before us is not so self‐evident that we should resolve it using the truncated Rule 40(e) process. We should instead have a full adversarial presentation before the en banc court.”

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