A District Court judge in Kansas has denied a defendant’s motion for reconsideration of an order denying its motion for summary judgment in a Fair Debt Collection Practices Act case on whether the reputational harm of purportedly falsely furnishing information to the credit reporting agencies is enough for the plaintiff to have standing to sue.
The background: The lawsuit centers on a debt collector’s alleged false reporting that three of a consumer’s debts were in active collection when the plaintiff had disputed them. The plaintiff argued this false reporting violated the FDCPA’s prohibition on using “false, deceptive, or misleading means” to collect a debt under Section 1692e(8).
- Earlier this year, the court found that the consumer had established Article III standing based on reputational harm — a concrete, intangible injury that bore a close relationship to the common law tort of defamation.
- In that ruling, Judge Julie A. Robinson of the District Court for the District of Kansas noted that the credit reporting agency, which publishes credit information to third parties, acted upon the allegedly false communication by reporting the debts as active collections and later updating them to “disputed” once the collector corrected its submission.
The ruling: The defendant moved for reconsideration, claiming the court committed a clear legal error by recognizing standing without proof of tangible harm such as a drop in credit score or denial of credit. But Judge Robinson disagreed, finding no new evidence or change in controlling law and rejecting the argument that further publication to a creditor was required.
- She wrote that the court had already determined the consumer “has shown defamatory statements, causation, that Experian understood the defamatory nature of the statements, publication, and actual harm.” Judge Robinson emphasized that reputational harm from a false credit report “impairs the consumer’s reputation for creditworthiness,” a principle long recognized in defamation law.
- The court distinguished this case from TransUnion v. Ramirez, which involved errors confined to internal credit files. In contrast, the judge said, the FDCPA addresses false communications to a credit bureau, which itself constitutes publication. She also declined to follow Seventh Circuit rulings that impose stricter proof requirements, finding those decisions “go too far.”
- “The court has neither committed clear error nor manifest injustice in disagreeing with a nonauthoritative decision from another circuit,” Judge Robinson wrote.
