Timing is everything. Reporting the results of a dispute investigation to a consumer and sending an update to the credit reporting agencies on the same day rendered it impossible for a plaintiff to continue her dispute of a debt, a District Court judge in Illinois has ruled, denying a motion to dismiss claims it violated the Fair Debt Collection Practices Act.
The background: The plaintiff originally filed suit in state court alleging seven violations of the FDCPA. Six of those claims, tied to the mailing of a collection letter despite her request for communications by email and text, were remanded back to state court earlier this year.
- What remained in federal court was a single claim under Section 1692e(8) of the FDCPA, which prohibits a debt collector from communicating false credit information, including the failure to note that a debt is disputed.
- The plaintiff disputed the debt in writing on June 24, 2024. The defendant acknowledged receipt of the dispute in a July 17 letter, stating that it had investigated the claim but found no evidence to support it. On that same day, the defendant reported to credit bureau Experian that the account “was previously in dispute” and that its investigation was “complete.”
- The plaintiff alleged this reporting was misleading because she continued to dispute the debt, and the defendant did not provide her a reasonable opportunity to respond before communicating otherwise to the credit reporting agency.
The ruling: Judge Thomas M. Durkin of the District Court for the Northern District of Illinois agreed that the plaintiff plausibly alleged a violation of the FDCPA. While the defendant argued that its investigation closed the matter and that the plaintiff had not sent additional communications to renew her dispute, the court noted the timing issue was decisive.
- Because the defendant reported to the credit reporting agency the very same day it sent its investigation letter, the plaintiff had no reasonable chance to reaffirm her ongoing dispute, Judge Durkin noted.
- This made it “plausible that [the] statement to the credit bureau was false because [the defendant] did not provide [the plaintiff] a reasonable amount of time to respond,” Judge Durkin wrote. The court distinguished the case from Foster v. AFNI, Inc., a 2020 Michigan decision cited by the defendant, where the collector waited two days after notifying the consumer before reporting the account as “previously disputed.”
