Judge Grants MSJ for Defense in FDCPA Case Over Letter Sent to Represented Individual

A District Court judge in Illinois has granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case, ruling that a letter sent to the plaintiff in response to a dispute does not constitute a communication in connection with the collection of a debt.

A copy of the ruling in the case of Velez v. Absolute Resolutions Investments and Absolute Resolutions Corp. can be accessed by clicking here.

Both the plaintiff and the defendant retained lawyers. The lawyer for the plaintiff sent the law firm representing the defendant a letter, notifying them that the plaintiff was represented by an attorney. The defendant’s law firm uploaded the letter into the defendant’s system, but the plaintiff’s account was not updated with the proper code to indicate that the plaintiff was now being represented or that the account required special handling. The lawyer representing the plaintiff sent the defendant another letter, disputing the debt and asking that it stop being reported to the credit reporting agencies because the plaintiff had been affected by the COVID-19 pandemic. When it received the letter, the defendant stopped attempting to collect on the debt and initiated an investigation. A few weeks later, the defendant sent the plaintiff — not his attorney — a letter saying it needed more time to investigate the dispute and would be deleting the account from the credit reporting agencies in the meantime. The letter included the statement: “While this communication is from a debt collector, this is not an attempt to collect a debt, but is solely to respond to your dispute pursuant to federal reporting laws.”

The plaintiff filed suit, alleging the letter made him feel anxious, stressed out, and harassed, leading him to turn down freelance work because of how he was feeling. He claimed the defendant violated Section 1692c(a)(2) of the FDCPA. That the plaintiff turned down work was enough for Judge Sara L. Ellis of the District Court for the Northern District of Illinois to rule the plaintiff had standing to sue.

Because the letter in question did not include a demand for payment and there was nothing in the letter seeking to induce the plaintiff to make a payment, coupled with the fact that the defendant undertook no other collection activity on the account — before or after receiving the letter — the letter was not a communication in connection with the collection of a debt, Judge Ellis ruled.

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