A District Court judge in Maryland has granted summary judgment to a debt collector in a consumer’s lawsuit under the Fair Credit Reporting Act and Fair Debt Collection Practices Act, ruling that the underlying dispute hinged on a legal question too unsettled for a furnisher to resolve.
The background: The plaintiff rented a Baltimore property and fell behind on her rent before the landlord turned the account over for collection.
- The plaintiff lived in the home from February 2021 to June 2023 and moved out without paying the balance, which the landlord and the defendant put at $47,575 including interest.
- Before she moved, a Baltimore City court entered a consent judgment for possession in the landlord’s favor that listed $8,221.93 in unpaid rent.
- The plaintiff disputed the debt with the credit reporting agencies, arguing the landlord was unlicensed for part of her tenancy and, under Baltimore ordinance and Maryland’s Assanah-Carroll decision, could not collect rent that accrued during that period.
- The defendant investigated, confirmed the balance with the landlord, and kept reporting the debt as disputed, prompting the plaintiff to sue under the FCRA, the FDCPA, and Maryland’s consumer debt collection and consumer protection statutes.
The ruling: Judge Richard D. Bennett of the District Court for the District of Maryland granted the defendant’s motion for summary judgment on all four claims.
- The judge held the plaintiff cleared the standing bar based on a 2024 credit denial from a lender, not her claimed emotional distress, which he noted no longer suffices on its own in the Fourth Circuit.
- On the FCRA claim, the judge wrote that the fight over whether the rent was collectible was the kind of dispute that “involves complex fact-gathering and in-depth legal analysis of the sort that courts would typically perform” and so was not objectively and readily verifiable by a furnisher.
- The judge also found the reported amount was accurate, explaining that the consent judgment was a judgment for possession only, not a money judgment, and therefore did not fix the total rent owed.
- On the FDCPA claim, he ruled the accurate amount defeated the false-representation theory and that the defendant’s verification procedures qualified for the bona fide error defense, since it was entitled to rely on the ledger and eviction documents its client provided.
- On the Maryland claims, the judge found the plaintiff could not show the defendant knew it lacked the right to collect or acted recklessly, given that the law on collecting rent from an unlicensed period remains unsettled and a furnisher is not required to adopt a consumer’s reading of a heavily disputed area of law.
