Ruh Roh, Raggy, the worm on standing may have finally turned. Many Fair Debt Collection Practices Act complaints allege that plaintiffs spent “time and money,” and it appears that the Court of Appeals has put a price tag on how much money needs to be spent in order for a plaintiff to have standing to sue, reversing a lower court’s dismissal of a suit. Just how much are we talking about? $3.95.
A copy of the ruling in the case of Mack v. Resurgent Capital Services and LVNV Funding can be accessed by clicking here.
The plaintiff defaulted on a credit card debt that was purchased by one of the defendants. The defendant placed the account with a collection agency, which sent a collection letter. The letter listed the original creditor and the current creditor, the balance that was owed, provided a website and phone number that could be used to pay the debt, and included the validation notice.
The plaintiff went to the local library, used one of the computers to print out a dispute letter, and spent $10.15 at the post office to mail the letter to the agency. Rather than receive a response from the agency, the plaintiff received another letter from one of the defendants, listing the names of the current and original creditors, the balance that was owed, informed the plaintiff that it had initiated a review of the inquiry it had received, and provided another validation notice.
The second letter confused the plaintiff, because she had requested validation from the agency and not received it. Now, she was being told she would have to request validation again, this time from someone different. So, she went back to the library, printed out another letter, and spent $3.95 at the post office to mail it.
The plaintiff had been unemployed and was caring for family members with serious health problems. She never received the validation she requested, so she filed suit, accusing the defendants of violating the FDCPA. The defendants sought, and won, a motion to dismiss, arguing the plaintiff did not suffer a concrete injury, and the District Court judge agreed, ruling the time and money spent to send the second validation request was not sufficient for the plaintiff to have standing to sue.
But the second postage fee is precisely the type of harm that Congress intended to protect consumers from when it enacted the FDCPA, the Appeals Court ruled. The defendants attempted to argue that the plaintiff spent the money to clear up her own confusion, not confusion they created, but the Appeals Court ruled that the money that was spent was not only to clear up the plaintiff’s confusion, but to maintain her right to seek validation of the debt.
“Namely, Congress sought to protect debtors from abusive debt collection practices that contributed to personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy,” the Appeals Court wrote. “Money damages caused by misleading communications from the debt collector are certainly included in the sphere of interests that Congress sought to protect.”
