A District Court judge in Maryland has granted a motion to dismiss filed by the defendants in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case that alleged a debt buyer did not have proof to collect on the underlying debt and failed to reasonably investigate his dispute.
The background: The debt in question was later allegedly sold to the defendant, a debt buyer, who then reported the account to the credit bureaus. The plaintiff claimed he never owed the debt to the buyer, never received proof of its ownership, and that the two credit reporting agencies he disputed the debt with failed to properly investigate his disputes. He also alleged defamation related to the credit reporting.
- Along with considering the motion to dismiss filed by the plaintiffs, Judge Adam B. Abelson of the District Court for the District of Maryland was asked to consider a motion by the plaintiff to file an amended complaint, on the grounds that he had now retained counsel — he filed the original complaint on his own.
- The suit accused the debt buyer of violating the FDCPA and Maryland state law and the two credit reporting agencies of violating the FCRA.
The ruling: Judge Abelson dismissed all of the plaintiff’s claims, finding the complaint failed to allege sufficient facts:
- FDCPA: The plaintiff did not adequately show that the debt buyer knew or should have known that the information it reported was false. The plaintiff’s belief that the debt was invalid was not enough, Judge Abelson ruled. The judge also found no evidence the plaintiff properly disputed the debt with the debt buyer to trigger a requirement to report it as disputed.
- FCRA: The court noted the only specific alleged inaccuracy in the credit reports was an incorrect account opening date, but the plaintiff failed to say what the incorrect date was or why it was false. The court found that the actions of the credit reporting agencies — forwarding the disputes to the debt buyer and reporting based on the responses — did not constitute unreasonable investigations.
- State Law: The Maryland Consumer Debt Collection Act and Maryland Consumer Protection Act claims failed because the plaintiff could not show the debt buyer acted with actual knowledge or reckless disregard of the debt’s invalidity. The defamation claim also failed, as the plaintiff did not show the reporting statements were defamatory under Maryland law.
- “Plaintiff’s belief that the debt is invalid is not the same as factual support for the allegation that LVNV knew or should have known that the debt is invalid,” Judge Abelson wrote in his ruling.
