Judge Grants MSJ for Defense, Denies Certification in FDCPA Suit

Fool me once, shame on you, the old saying goes. Fool me twice, shame on me. Did you know there was a third part? Fool me a third time, then that gives you the right to sue me for allegedly violating the Fair Debt Collection Practices Act.

A District Court judge in Illinois has granted a defendant’s motion for summary judgment and denied a plaintiff’s motion for class acton certification after it was sued for allegedly violating the FDCPA when it sought information from an individual by sending a letter and financial disclosure form after a judgment had been entered against the plaintiff.

A copy of the ruling in the case of McCoy v. Midland Funding, LLC, Midland Credit Management, Inc., and Encore Capital Group, Inc., can be accessed by clicking here.

The plaintiff defaulted on her credit card debt. The defendant sent 18 letters to the plaintiff. The plaintiff agreed to a payment plan, but one of her checks was returned for insufficient funds. Two months later, she agreed to another payment plan, but again a check was returned for insufficient funds. A year later, the defendant sued the plaintiff for the unpaid debt and the parties reached a settlement and another payment plan. The terms of the settlement stated that if the plaintiff defaulted on the payment plan, the suit could be reinstated and a judgment could be entered. The plaintiff defaulted on the payment plan — for the third time — and the defendant obtained a judgment.

The defendant sent a letter and disclosure form to the plaintiff. The letter offered more options to the plaintiff, including another payment plan. But, this time, the plaintiff filed suit, alleging the letter and disclosure form violated the FDCPA by falsely implying the documents were “legal process.”

The plaintiff alleged that because the financial disclosure form was similar to the form that a court would use that an unsophisticated consumer would be confused by it. But Judge Gary Feinerman of the District Court for the Northern District of Illinois, Eastern Division, ruled the plaintiff was not giving an unsophisticated consumer enough credit.

“Given all this, an unsophisticated consumer easily could conclude that the letter and disclosure form came from Midland, not a court, and easily could understand the letter to present a choice: ‘Do what we ask, or run the risk that the owner will ask the court to make you,’ ” Judge Feinerman wrote. “On that reading, the letter does not misleadingly suggest that it is legal process.”

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