Companies in the accounts receivable management industry can add “irritation,” “concern,” “feeling targeted,” and “hustled,” to the list of harms that do not create standing to sue in federal court when accusing a debt collector of violating the Fair Debt Collection Practices Act after a District Court judge in Ohio granted a defendant’s motion for summary judgment in a class action because it did not inform the recipient of a collection letter what would happen if she made a payment on a time-barred debt.
A copy of the ruling in the case of Barnes v. Midland Credit Management can be accessed by clicking here.
The plaintiff received a collection letter from the defendant attempting to collect a debt for which the statute of limitations had expired. The letter included several proposals for the plaintiff to repay less than what was owed. The letter also included the following disclosure: “Because of the age of your debt, we will not sue you for it. If you do not pay the debt, we may continue to report it to the credit reporting agencies as unpaid.”
The plaintiff filed suit, alleging the letter violated the FDCPA because it did not inform her that if she agreed to one of the proposals or made a partial payment, the statute of limitations would restart and the defendant could sue the plaintiff for the entire balance that was owed.
Noting that the plaintiff has to allege more than just a bare, procedural violation of the FDCPA to confer standing, Judge Christopher Boyko, Sr. of the District Court for the Northern District of Ohio turned to the plaintiff’s deposition in the case. When asked for her reaction to the letter, the plaintiff said she was “irritated” and that she was being “hustled.” She said she was “concerned” whether she owed the debt and whether the defendant thought she was stupid. The plaintiff also said she was “annoyed” and that the letter seemed “wonky” and that it “produces fear and anxiety,” for others, but not for her because she understands the law.
As Judge Boyko noted, the plaintiff never heard from the defendant again after receiving the letter. The debt is not on her credit report and she will not or can not be sued for not paying it. At the end of the day, what harm has been done? Not enough, Judge Boyko ruled.
The plaintiff “has not suffered any actual or imminent injury nor concrete and particularized harm or material risk of harm as the result,” of receiving the letter, and “lacks Article III standing to pursue her FDCPA lawsuit against Defendant Midland Credit Management, Inc. both on her own behalf and as a representative of a putative class.”
