A District Court judge in Ohio has granted a defendant’s motion for judgment on the pleadings in a Fair Debt Collection Practices Act case ruling that the underlying debt in question did not meet the statute’s definition of debt.
A copy of the ruling in the case of Klock v. United Collection Bureau can be accessed by clicking here.
The plaintiff filed suit, alleging the defendant failed to provide a letter notifying the plaintiff of the alleged debt and providing the plaintiff with 30 days to dispute said debt. The plaintiff claimed to have repeatedly requested such a document, which was never sent. The only document that was sent from the defendant to the plaintiff was an agreement for weekly payments that were being taken from the plaintiff’s bank account. The defendant was attempting to collect an alleged tax that was owed to the state of Indiana. The plaintiff was seeking a refund of the $3,000 that was collected from his account as well as $80,000 in compensatory damages, $46,000 in punitive damages, and $146,000 in pain and suffering.
The problem for the plaintiff? Tax debt is not covered by the FDCPA.
To be fair, Judge James R. Knepp II of the District Court for the Northern District of Ohio breaks down the definition of debt in the FDCPA — any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment — and dives into what constitutes a “transaction” because that words is not defined in the statute.
After looking at various precedents from other District Courts, Judge Knepp determined that non-consensual debts — like taxes — are not covered under the FDCPA, nor are debts that are not for personal, family, or household purposes. Tax debts, noted Judge Knepp primarily are for public and collective purposes and only benefit people, families, and households on a secondary basis. Judge Knepp also noted that bankruptcy courts within the Sixth Circuit have ruled that income tax debt is not considered a consumer debt, further cementing his ruling that the debt in this case is not subject to the FDCPA.
