A District Court judge in Michigan has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act case on the grounds that not removing a dispute notification on the plaintiff’s credit report is not a false or misleading statement in connection with the collection of a debt.
The background: The plaintiff reviewed her credit report last April and noticed that a debt from the defendant was marked as disputed. The plaintiff sent a letter to the defendant indicating she was no longer disputing the account. However, the defendant did not update the credit reporting agencies to reflect that the debt was no longer disputed.
- The plaintiff argued that this failure to remove the dispute notation was a violation of Section 1692e(8) of the FDCPA, which prohibits debt collectors from reporting information to credit reporting agencies that is known or should be known to be false, including failing to update a debt’s dispute status.
The ruling: In her ruling, Judge Linda V. Parker of the District Court for the Eastern District of Michigan determined that the dispute notation on the plaintiff’s credit report did not qualify as a false or misleading statement in connection with the collection of the debt. Judge Parker emphasized that the FDCPA’s provisions apply only to communications made “in connection with the collection of any debt.” In this case, the notation was simply a remark on the credit report and did not constitute a direct attempt to collect the debt or an effort to induce payment.
- The judge further reasoned that failing to update the dispute status on a debt that is no longer disputed does not harm the consumer in a way that would violate the FDCPA. Notably, the court rejected the plaintiff’s reliance on cases from other jurisdictions, which it found unpersuasive, emphasizing that the plaintiff failed to demonstrate how the notation was made with the intent to collect the debt.
- Judge Parker concluded that the plaintiff did not establish that the notation was a false statement made in connection with debt collection and dismissed the case.
