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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
I’m stating this at the outset — This is going to be one of those “I’m not a lawyer, so maybe the reason I thought this was an interesting case is really not that interesting and I’m just wasting everyone’s time by writing about it, but I’m going to write about it anyway because maybe I’m wrong and because even if the reason I am writing about it isn’t interesting, the actual claim itself is something that lawyers have been seeing more and more of recently and people need to be aware of it” cases. A defendant has removed a case from state court to federal court in California after it was sued for violating the Fair Debt Collection Practices Act by not removing a dispute flag from an account when furnishing information to the credit reporting agencies after the plaintiff allegedly communicated that she was no longer disputing the account.
A copy of the complaint, which was removed to the District Court for the Central District of California can be accessed using case number 23-cv-00615 or by clicking here.
What I find interesting is that the plaintiff’s allegations start with the plaintiff sending a letter to the defendant indicating that the debt was no longer being disputed. Usually, the allegations portion of the complaint starts further back in the process, like when the plaintiff received the communication from the defendant. Then, the plaintiff communicated that the debt was disputed. This case starts last July, when the plaintiff sent a letter to the defendant to inform it that she was was not disputing the debt and asked the defendant to update its credit reporting accordingly.
Six weeks later, when she checked her credit report, the plaintiff saw that the debt was still being reported as disputed.
Lawyers across the country have been talking about these kinds of suits — where plaintiffs dispute a debt, then revoke that dispute, and sue when the collector fails to update the account accordingly — for a while now. As a reminder, this is only a complaint and we are only getting one side of the story, but it’s important for furnishers to ensure that accounts are updated promptly and properly.
The complaint accuses the defendant of violating Section 1692e of the FDCPA by making false, deceptive, or misleading representations when attempting to collect on a debt.
The defendant removed the case to federal court on the grounds that it invoked the FDCPA, which is a federal statute.
