Seventh Circuit Reverses Ruling for Plaintiff in FDCPA Suit, Continues Attack on Standing

Continuing its year-long attack on standing to file Fair Debt Collection Practices Act lawsuits, the Seventh Circuit Court of Appeals yesterday reversed a lower court’s ruling and ordered it to dismiss a case where the defendant did not send a written notice within five days of the initial contact and where one of the defendant’s representatives did not identify herself as a debt collector or indicated she was attempting to collect a debt during a conversation because alleging that the plaintiff suffered emotional harms as a result of the defendant’s actions is not enough to allege that the plaintiff incurred a concrete injury. The case was argued before the Seventh Circuit by Dennis Barton of The Barton Law Group.

A copy of the ruling in the case of Wadsworth v. Kross, Lieberman & Stone can be accessed by clicking here.

The plaintiff was hired for a new job and received a signing bonus. The plaintiff was ultimately fired and, under the terms of her employment agreement, was obligated to repay the bonus. The defendant was hired to collect on the obligation. The defendant mailed a collection letter to the plaintiff and placed four phone calls in the ensuing weeks after the letter was sent. The plaintiff filed suit, alleging the defendant violated Section 1692g(a) of the FDCPA by not providing a written notice of her statutory rights within five days of the initial communication and Sections 1692d(6) and 1692e(11) when the representative did not identify herself as a collector or indicate she was trying to collect a debt during the conversations. A District Court judge granted summary judgment in favor of the plaintiff, rejecting the defendant’s arguments that the debt did not meet the definition of a “debt” under the FDCPA and the defendant was not a “debt collector” because the debt was not in default at the time the letter and phone calls were sent.

But, before getting to that, the Seventh Circuit said the Court should have determined whether the plaintiff had standing to sue or not. In order for the plaintiff to have had standing, the Seventh Circuit ruled, she had to have done something like paid money she did not owe or would have disputed because of the defendant’s actions. But she did neither. Alleging she suffered stress and anxiety is not enough to confer standing, the Seventh Circuit said. The plaintiff “has offered us no basis to believe that her substantive interests under the Act would have been better protected if Kross had complied with the FDCPA.”

This is the latest in a series of rulings from the Seventh Circuit that attack the issue of standing in FDCPA lawsuits.

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