For the second time, a District Court judge in Tennessee has dismissed a Fair Debt Collection Practices Act lawsuit because the plaintiff lacked standing, ultimately ruling that the defendant’s decision not to honor a statement it made to the plaintiff that indicated a payment plan would be available in the future is not a violation of the statute.
The background: The plaintiff filed a lawsuit against the defendant, a debt collector, alleging violations of the FDCPA. The issue began in July 2022 when the defendant contacted the plaintiff regarding a debt owed on an apartment lease. During their initial conversation, the plaintiff informed the defendant that she was out of work and unable to make payments at that time. The plaintiff inquired about the possibility of setting up a payment plan, and she was informed by the defendant that she would be able to establish payment arrangements when she was financially able.
- However, when the plaintiff contacted the defendant later that month to set up the payment plan, the defendant reneged on its promise and demanded full payment. It also threatened to report the debt to credit agencies if payment was not made.
- The plaintiff alleged that the defendant’s practice of offering payment plans only to withdraw the offer later was a tactic to pressure consumers into making larger payments. She claimed that this behavior was part of a broader strategy by the defendant to maximize payments from consumers by initially promising flexibility and then enforcing harsher terms.
The ruling: Judge Samuel H. Mays, Jr. of the District Court for the Western District of Tennessee ultimately dismissed the plaintiff’s complaint, finding that she lacked standing to bring the case under the FDCPA. The judge noted that while the accrual of additional interest could be considered an injury sufficient to confer standing, the plaintiff failed to establish that her injury was caused by the defendant’s actions.
- Specifically, Judge Mays found that the plaintiff did not sufficiently demonstrate that the defendant was legally obligated to provide the payment plan and that its failure to do so constituted a false representation under the FDCPA.
- Judge Mays also emphasized that the FDCPA does not necessarily make every promise made by a debt collector legally enforceable. In this case, the plaintiff’s assertion that the defendant’s statement about a future payment plan created an enforceable obligation under the FDCPA was not supported by sufficient legal precedent.
