EDWI Judge Grants MTD in FDCPA Case Over Credit Reporting Disclosure in Letter

In a case that was defended by Khari Ferrell of Malone Frost Martin, a District Court judge in Wisconsin has granted a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act by informing the plaintiff that it would notify him before reporting the debt to a credit reporting agency.

A copy of the ruling in the case of McGee v. State Collection Service can be accessed by clicking here.

The plaintiff incurred a medical debt that was placed with the defendant for collection. The defendant sent a collection letter to the plaintiff that included the following statement: “[i]f requested, this office will notify you if and when it intends to report this claim to a credit bureau, but in no event will that happen until after the 30 day validation period described below.”

The plaintiff filed suit, alleging the statement violated Section 1692e and 1692f of the FDCPA because it made false, deceptive, or misleading representations by attempting to lure the plaintiff into calling the defendant by not providing information the defendant already knew — whether it would report the debt to a credit bureau — and failing to explain the method by which the plaintiff could invoke his right to be notified about when the debt would be reported. The plaintiff alleged he did not invoke his rights because he did not know how to do so, which caused him to suffer an “informational injury.”

Looking at some of the rulings that have come out of the Seventh Circuit Court of Appeals in the past six months with regard to standing, Judge J.P. Stadtmueller of the District Court for the Eastern District of Wisconsin did not have to look far to determine the plaintiff lacked the necessary standing to file his lawsuit.

While pleading he did not take action because of the defendant’s alleged “deception,” the plaintiff failed to take the next step, Judge Stadtmueller wrote, detailing the damages he suffered as a result of the defendant’s actions. “He has not alleged that, because of Defendant’s deception, he failed to act or was confused and, therefore, paid
a debt he did not owe, chose to make payments on a lower-interest debt rather than on a higher-interest debt which was the subject of the deceit, or, relevant to the present case, failed to receive information about when his alleged debt would be reported and could not make informed decisions about his priority of payment,” the judge wrote in granting the motion to dismiss.

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