The Court of Appeals for the Seventh Circuit has affirmed a lower court’s ruling in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act, agreeing with the lower court that the plaintiff lacked standing because she declined to provide additional information to justify how the defendant’s actions interrupted the plaintiff’s loss of income as a result of being self-employed. Although, the Appeals Court did provide an example as to how the plaintiff could have shown a loss of income, perhaps providing a blueprint for other self-employed individuals to do so in the future.
The Background: The plaintiffs incurred a debt to a financial institution that was sold to the defendant. The defendant attempted to collect on the debt without verifying the balance that was owed. The plaintiff, and her brother — who pretended to be the plaintiff during one call — filed suit, accusing the defendant of violating the FDCPA. To prove she had standing to sue, the plaintiff filed an affidavit stating that she had interrupted her self-employment to “mull over my memories” and “scour my records” to find information about the debt. The judge requested additional information from the plaintiff — such as details about her self-employment and how any interruption lead to a loss of income or other tangible detriment — but the plaintiff failed to provide any additional information, leaving the judge to dismiss the complaint for lack of standing.
The Appeal: The Court noted it was “easy” to see a scenario where attempts to collect on a debt could impact a self-employed individual’s income.
- “Imagine a writer who tries to work from 8 am to noon every day, gets interrupted by a dunning phone call at 8:05, loses her train of thought (and thus a day’s work), and cannot finish the manuscript on the original schedule, which reduces or delays her royalties,” the Appeals Court wrote.
- But imagining it isn’t enough. And the plaintiff never supplied any evidence that she earned income from her self-employment, “let alone how the defendant’s failure to say that the Bank had not warranted the accuracy of its calculation affected self-employment income.”
- “Interruption of self-employment could cause a loss, but whether it did cause a loss must be established by evidence,” the Appeals Court wrote.
