Is it possible for an individual to sue a debt collector for violating the Fair Credit Reporting Act and Fair Debt Collection Practices Act for allegedly attempting to collect a debt that the individual believes he did not owe, when the individual took no action against the original creditor for placing the allegedly illegitimate debt in the first place? A District Court judge in New York says no, and has granted a defendant’s motion for judgment on the pleadings.
A copy of the ruling in the case of Mohnkern v. Equifax Information Services, Experian Information Solutions, TransUnion, Breckenridge Group, and National Credit Systems can be accessed by clicking here.
The plaintiffs signed an apartment lease, but never moved in. The lease included a clause that allowed the plaintiffs to terminate the lease if they found someone else to take it over. They did, but the owner of the apartment allegedly signed separate leases and thwarted the attempts to have the new tenants take over the original lease. The owner placed the debt with NCS for collection, which reported it to the three major credit reporting agencies. The plaintiffs disputed the debts, NCS confirmed the accuracy of the information and continued to report it.
The plaintiffs filed suit, alleging NCS violated Section 1681s2-b of the FCRA for not conducting a proper investigation of the dispute, and Sections 1692e, 1692e(2)(A), 1692e(5), 1692e(10), and 1692f(1) of the FDCPA for attempting to collect the allegedly invalid debt.
With respect to the FCRA claim, Judge David G. Larimer of the District Court for the Western District of New York ruled that while the plaintiffs may have believed their debt was inaccurate, that belief is based on an unresolved legal conclusion. Because the claim was “tethered to a legal dispute,” it cannot form the basis of an FCRA claim, Judge Larimer ruled.
Regarding the FDCPA claim, which was based on “nothing more than their conclusory and self-serving allegations that they do not owe the Debt,” the judge ruled the plaintiffs did not adequately state a claim and dismissed that particular claim.