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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.
One of the toughest jobs that companies in the credit and collection industry face these days is deciphering what a consumer means when he or she sends a communication indicating that there is a potential issue with the account. Is the consumer disputing the debt? Is the consumer refusing the pay the debt? Is the consumer requesting that communications cease? Is it all or some of them together? A collection operation is facing a Fair Debt Collection Practices Act lawsuit because it reported a debt to the credit reporting agencies as disputed after a consumer submitted a letter indicating that she refused to pay the debt and requesting that communications cease.
The background: As far as the complaint describes, the plaintiff sent an unprompted letter to the defendant last November in which the plaintiff indicating she was refusing to pay the debt and requested that the defendant cease all communication unless the defendant planned to take legal action.
- The plaintiff checked her credit report a few weeks later and noticed that the defendant was reporting the debt as disputed to the credit reporting agencies. The report was allegedly not only made without the plaintiff’s consent, but the plaintiff was not disputing the debt, according to the complaint, “merely exercis[ing] his [sic] legal right to refuse to pay.”
- Reporting the debt as disputed constituted not only a false and misleading representation about the debt, but also a continued attempt to collect on the debt after the plaintiff had requested to cease communications.
- The defendant’s actions caused the plaintiff to suffer “significant” damages including denial of credit and loss of creditworthiness, along with emotional distress in the form of anxiety, embarrassment, frustration, and sleeplessness.
The claims: The complaint accuses the defendant of violating Section 1692e(8) of the FDCPA by falsely reporting the debt as disputed when the plaintiff had “only exercised his [sic] legal right to refuse payment.”
- The defendant is also accused of violating Section 1692c(c) of the FDCPA by continuing collection efforts after the plaintiff had invoked his right to refuse payment.
- The defendant is also accused of violating Section 1692e(2)(A) of the FDCPA by misrepresenting the legal status of the debt as disputed.
