A District Court judge in California has denied a motion to dismiss filed by a collection operation in a Fair Debt Collection Practices Act case on the grounds that furnishing information about a debt to a credit reporting agency constitutes debt collection activity, but did grant motions to dismiss for two officers of the operation that were also named in the lawsuit.
A copy of the ruling in the case of Johnson v. LVNV Funding et al. can be accessed by clicking here.
The defendant has been reporting information about an alleged debt to the credit reporting agencies since 2019. In 2022, the plaintiff sent a letter to the defendant, seeking proof of the alleged debt and revoking consent to be called by the defendant. The defendant has yet to respond to the letter, according to the complaint.
The plaintiff filed suit, alleging the defendants violated the FDCPA and the Fair Credit Reporting Act. The defendants filed motions to dismiss — the officers because the court lacked personal jurisdiction and the operation on the FDCPA claim because it never engaged in any action that constitutes debt collection under the statute.
But furnishing information about a debt to a credit reporting agency is a debt collection activity, the Federal Trade Commission declared in 2000 via an informal opinion letter, which has been used by a number of different courts across the country through the years. The FTC stated in its 2000 letter that it is not permissible for a debt collector to report a debt to credit reporting agencies after receiving, but not responding to, a dispute notice. “The Court concludes that the allegation that Defendant LVNV Funding continued to report the disputed debt to credit reporting agencies is sufficient at this stage to demonstrate that Defendant LVNV Funding did not ‘cease collection of the debt’ within the meaning of § 1692g(b),” wrote Judge William Q. Hayes of the District Court for the Southern District of California.
The defendant also attempted the argument that the plaintiff’s claim was time-barred, but Judge Hayes determined that the defendant’s continued furnishing of the information to the CRAs demonstrated that the claim is not barred by the FDCPA’s statute of limitations.
