A federal judge in Pennsylvania has “reluctantly” granted a motion to certify a case as a class-action, after plaintiffs accused a collection agency of violating the Fair Debt Collection Practices Act by accidentally aging accounts following an inputting error, even though the agency removed or subsequently updated all of the tradelines in the affected individuals’ credit reports.
A copy of the ruling in the case of Corinne O’Dell v. National Recovery Agency can be viewed here.
It appeared to go against everything the Judge Edward G. Smith believed in granting the motion, but he did so anyway.
This is a “tenuous case involving a technical violation, and the harm is difficult to pinpoint,” Judge Smith wrote at the top of his ruling, adding that “because the plaintiff has Article III standing and the requirements of Federal Rule of Civil Procedure 23 have been met, the court will reluctantly grant the motion for class certification.”
The plaintiff, had eight debts with a healthcare organizations. The debts were subsequently placed with the defendant, a collection agency, which placed the debts on the plaintiff’s credit report. The healthcare organization then upgraded its computer systems. As part of the upgrade, it recalled all of the debts from the collection agency. Once the upgrades were completed, the debts were returned back to the defendant. The defendant, once it received he debts a second time, listed the debts as new on the plaintiff’s credit report, instead of returned. The defendant also issued new account numbers, reported the ‘date placed for collection’ as the date the accounts were returned and inputted, and also reported the ‘date of first delinquency’ as the date the accounts were returned and inputted.
The plaintiff argued that by using the new dates, the debts would now stay on her credit report longer than originally required. The plaintiff filed a class-action lawsuit, alleging that up to 1,200 other individuals were subjected to the same issue. The defendant argued that the plaintiff did not suffer an injury in fact, as required by Article III, and therefore, should not be allowed to sue. The defendant removed or updated all of the affected tradelines, thereby removing the potential for any injury, it argued.
However, Judge Smith wrote, “It is entirely possible that the class members suffered an economic harm when their accounts were improperly aged (or at the very least, it is plausible that they suffered a statutory harm). Fixing the accounts did not “completely and irrevocably eradicate” this harm because it did not provide any monetary relief.”
