Judge Grants MSJ for Defendant in FDCPA Case Over Website Disclosure

Sometimes, collectors will use a broad brush and expansive statements to try and cover as much ground as possible when letting consumers know about the rules and regulations related to collecting on unpaid debts. Those statements do not specifically violate the Fair Debt Collection Practices Act ruled a District Court judge in Illinois, who granted a defendant’s motion for summary judgment in a case that was defended by David Schultz and the team at Hinshaw & Culbertson.

A copy of the ruling in the case of Schumacher v. Merchant’s Credit Guide Company can be accessed by clicking here.

The plaintiff incurred a medical debt that was not paid and placed with the defendant for collection. Six years later, the plaintiff noticed the debt when reviewing his credit report. When he went to the defendant’s website and clicked on the button to access its payment portal, there was a disclosure related to the statute of limitations, which had expired in this case. The disclosure read:

Your account may or may not be past the statute of limitations. Each state has a law that limits the time in which you can be sued for an unpaid account/debt. If your account is beyond the statute of limitations, you cannot and will not be sued by Merchants’ Credit Guide Company or its creditor/client. If you acknowledge the debt, promise to pay, or make a payment on the debt, the statute of limitations may restart. Merchants’ Credit Guide Company, or its creditor/client, will still not sue you to enforce payment. For accounts we receive from creditors who allow us to credit report their accounts, if you do not pay the debt, we may continue to report it to the credit reporting agencies as unpaid for as long as the law permits this reporting. 

The plaintiff filed suit, alleging the disclosure violated Sections1692e, 1692e(2)(A), 1692e(10), and 1692f of the FDCPA because the statement — Your account may or may not be past the statute of limitations — was false, deceptive, and misleading. The disclosure on the site should have been more specific, the plaintiff alleged, even though it was there on a publicly accessible webpage that was viewable to any individual.

Because the page — unlike collection letters — was not associated with a particular account, the generic nature of its claim was not a violation of the FDCPA, ruled Judge John Lee of the District Court for the Northern District of Illinois, Eastern Division.

” … the disclosure necessarily speaks in general terms and cannot say whether the viewer’s particular account was or was not time-barred,” Judge Lee wrote. “When viewed in this context, the statement, ‘Your account may or may not be past the statute of limitations,’ is neither misleading nor deceptive; it is simply imprecise. What is more, the disclosure does on to state that ‘[i]f your account is beyond the statute of limitations, you cannot and will not be sued by Merchants’ Credit Guide Company or its creditor/client.’ ” 

To prove that an unsophisticated consumer would be misled by the statement, the plaintiff needed to provide some proof, such as a survey, which he did not do, Judge Lee noted. There is no “support” for the plaintiff’s “contention that this or a substantially similar disclosure risks confusing, deceiving, or misleading unsophisticated consumers.” 

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