Judge Denies MTD in FDCPA Case Over Time-Barred Debt Disclosure

A District Court judge in Illinois has denied a defendant’s motion to dismiss and its motion to decertify a class after it was sued for allegedly violating the Fair Debt Collection Practices Act regarding a time-barred notice in a collection letter.

A copy of the ruling in the case of Pierre v. Midland Credit Management can be accessed by clicking here.

The plaintiff received a collection letter from the defendant related to a debt for which the statute of limitations had expired. In the letter, the plaintiff was presented with three payment options — a one-time payment of a discounted total, 12 monthly payments with a lower discount, or payments as low as $50 per month. The letter also included the following statement:

The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it, we will not report it to any credit reporting agency, and payment or non-payment of this debt will not affect your credit score.

The plaintiff filed suit, alleging the letter violated the FDCPA by being deceptive regarding whether the defendant could or could not sue for the unpaid balance. The defendant filed its motion to dismiss, arguing the plaintiff lacked standing to sue and based on the content of her deposition.

The defendant attempted to use the Appeals Court ruling in Casillas v. Madison Avenue Associates as evidence that suffering a bare procedural harm does not rise to the level of an FDCPA violation, but Judge Harry Leinenweber of the District Court for the Northern District of Illinois, Eastern Division, determined that Casillas did not apply in this case. This case deals with a “misinformation” situation, Judge Leinenweber said, and does not involve a statutory disclosure, as it did in Casillas. Misleading an individual about the possibility of reviving the statute of limitations is a “significant risk.”