Judge Dismisses FDCPA Suit After Two Agencies Report Same Debt to Credit Bureau

A District Court judge in Connecticut has granted a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act because it was one of two collection agencies that reported the same unpaid debt to a credit bureau.

A copy of the ruling in the case of Reyes v. I.C. System can be accessed by clicking here.

The plaints reviewed his credit report earlier this year and noted that the defendant and another collection agency were both reporting an unpaid debt of $254 that was owed to DirecTV. The plaintiff filed suit, alleging the defendant violated Section 1692e of the FDCPA by using false, deceptive, or misleading conduct to collect on an unpaid debt because the duplicate entry caused his credit score to drop. The plaintiff did not name the other collector in his lawsuit against the defendant.

The defendant argued that it did not use false or deceptive means to attempt to collect on the debt because the defendant had no idea if the debt was being reported as unpaid by another agency. The plaintiff does not argue that he owes the debt and did not indicate in his complaint which of the two agencies reported the debt to the credit bureau first, which, Judge Jeffrey Meyer of the District Court for the District of Connecticut said was “fatal” to his claim.

“…even assuming that a credit report containing duplicative debt data can be said to be false, misleading, or deceptive in nature, the statute requires more than that to prove a violation: it requires that the debt collector ‘use’ such improper means to attempt to collect a debt,” Judge Meyer wrote. “If ICS was the first debt collector to report the debt, then there are no grounds to plausibly conclude that ICS was responsible for any subsequent duplicative reporting by another debt collector and thus that ICS tried to ‘use’ a false representation to collect a debt from Reyes. The only ‘use’ of the report to the credit reporting agency in this situation would be completely true: that ICS was collecting a $254 debt.”

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