Judge Grants MTD in FDCPA Case Over No-Longer Disputed Debt

A District Court judge in California has granted a defendant’s motion to dismiss — although giving the plaintiff an opportunity to amend his complaint — after it was accused of violating the Fair Debt Collection Practices Act because it allegedly did not update information that was being furnished to the credit reporting agencies to indicate that a debt was no longer being disputed, ruling that such a communication falls outside the scope of “in connection with the collection of any debt.”

A copy of the ruling in the case of Samano v. LVNV Funding can be accessed by clicking here.

The plaintiff sent a letter to the defendant, indicating that he was no longer disputing the debt in question. When he checked his credit report a month later, he found that the credit reporting agencies were still reporting the debt as disputed. He filed suit, alleging the collector violated Section 1692e(8) of the FDCPA by communicating or threatening to communicate information which is known or which shoul be known to be false.

The defendant argued that the communication in question — which should have occurred between itself and the credit reporting agencies — was not in connection with the collection of a debt. Relying on precedent set by the Eighth Circuit Court of Appeals in McIvor v. Credit Control Services, Judge Sheila K. Oberto of the District Court for the Eastern District of California acknowledged that the communication in question was governed by the Fair Credit Reporting Act and not the FDCPA.

“…Plaintiff pleads no facts from which a collection-related, as opposed to a compliance-related, motivation could be inferred,” Judge Oberto wrote. “He does not allege, for example, that by continuing to report the debt as disputed, Defendant is inducing Plaintiff to pay the debt in order to remove the disputed notation from his account. Instead, he merely alleges that Defendant falsely reported his accounts as disputed to credit reporting agencies. That is not enough to state a claim for a violation of § 1692e.”

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