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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
The interplay and overlap between the Fair Credit Reporting Act and the Fair Debt Collection Practices Act can be very confusing when it comes to the word, “dispute.” Each has a separate course of action depending on what the consumer is attempting to do and each course can be complicated. Sometimes, it seems odd that plaintiffs choose one statute over the other or fail to mention both. In this case, a plaintiff is accusing a collection operation of violating the FDCPA and state law in Pennsylvania over how a debt was reported to the credit reporting agencies, without invoking the FCRA.
The background: The plaintiff moved from New York to Pennsylvania and canceled her car insurance. The insurance company said she would get a refund of $230, but two days after the refund was issued, the insurance company notified the plaintiff that she owed $230. The plaintiff disputed the debt with the insurer and even filed a complaint with the Consumer Financial Protection Bureau, but the debt was sent to the defendant for collection.
- The plaintiff disputed the debt with the defendant, which said it would investigate the debt. Ten days later, the plaintiff contacted the defendant and was told that the defendant was unaware of any dispute or active investigation, according to the complaint.
- The defendant continued to attempt to collect on the debt and the plaintiff, now frustrated at how much time she had spent disputing it and being worried about her credit score, told the defendant she could pay the debt in a few months.
- The defendant allegedly informed the plaintiff it would not report the debt if she agreed to pay the debt in two installments a month apart from each other, to which the plaintiff agreed.
- However, after the first payment was withdrawn, the plaintiff saw that the defendant was reporting the debt to the credit reporting agencies, and it was now being negatively reflected on her credit report.
- Even after withdrawing the second payment, the defendant was still reporting the debt, according to the complaint.
- The plaintiff contacted the defendant and was assured that the reporting was an error and that it would be removed from her report within three days and that she would receive an email to that effect.
- When the tradeline wasn’t removed and the email wasn’t received, the plaintiff filed this lawsuit.
- Despite claiming the defendant failed to reasonably investigate the dispute, the plaintiff only accused the defendant of violating the FDCPA.
The claims: The suit accuses the defendant of violating Sections 1692e, 1692e(8), 1692e(10), and 1692f of the FDCPA, along with the Pennsylvania Fair Credit Extension Uniformity Act and the Pennsylvania Unfair Trade Practices and Consumer Protection Law.
