The Court of Appeals for the Seventh Circuit has upheld rulings in favor of the defendants who were sued by a consumer for allegedly violating the Fair Credit Reporting Act and the Fair Debt Collection Practices Act when they reported a loan as delinquent after it had been cured during the bankruptcy process, ruling that the plaintiff did not provide enough information in her dispute when she failed to identify which credit reporting agency she disputed the debt with, and because she lacked standing to pursue her FDCPA claim.
The Background: The plaintiff obtained a mortgage to buy a home. She fell behind on her payments and one of the defendants filed for foreclosure. The plaintiff filed for bankruptcy protection and made all the necessary payments to have the bankruptcy discharged.
- But the defendant that was servicing the loan reported an inaccurate loan payment due date, which made it look like the plaintiff’s loan was in default. The defendant informed the plaintiff that it would only accept a payment to cure the default, not a regular monthly payment. The other defendant then filed a second foreclosure action against the plaintiff. The second foreclosure action was later voluntarily dismissed after investigations and corresponding corrections to the account.
- While this was all being worked out, a defendant called the plaintiff more than 12 times in a month and also sent agents to the plaintiff’s home to leave tags on her door once a week for three years.
- The plaintiff filed suit, accusing the defendants of violating the FCRA by failing to conduct a reasonable investigation and violating the FDCPA.
The Ruling: In her dispute, the plaintiff said that she had notified “one or more consumer reporting agencies” that she was disputing her loan being classified as delinquent. But because she failed to identify which of the credit reporting agencies were sent disputes, the defendant did not know to which CRAs it needed to report the results of its investigation and the District Court was not wrong in granting the defendants’ motion to dismiss, the Appeals Court ruled.
- The plaintiff claimed to have standing to pursue her FDCPA lawsuit because she incurred legal fees to defend against the second foreclosure action. But hiring a lawyer and seeking legal advice does not meet the level of having suffered a concrete injury, the Appeals Court noted.
- Even if it did, the plaintiff would still not have standing because the lower court excluded all evidence that could show the plaintiff was monetarily harmed.
