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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.
It does not take a letter campaign, a call blitz, or a third-party disclosure to draw a lawsuit. Sometimes it takes one sentence from one collector on one call. A collection operation is facing claims in a Georgia federal court that it violated the Fair Debt Collection Practices Act because of how it answered a consumer’s question about whether making payments on her account would show up on her credit report.
The background: The plaintiff allegedly owed a debt arising from a consumer credit card account. Tthe plaintiff and a representative of the defendant spoke by telephone.
- The plaintiff was not able to pay the full balance on the account, according to the complaint. She asked whether, if she made payments on the debt to boost her credit score, those payments would show up on her credit report.
- The defendant allegedly replied that the plaintiff’s credit report would only be updated once she paid the debt in full.
- That response misled the plaintiff into believing she had to pay the account in full before her credit report would be updated, according to the complaint.
- The complaint frames the statement as more than an inaccuracy about payment posting. Because the Fair Credit Reporting Act permits consumer credit information to be reported for only seven years from the date of first delinquency, telling the plaintiff that the report would not change until the balance was satisfied implied, and effectively threatened, that the account would remain on her file longer than the FCRA allows, according to the complaint.
- The complaint also leans on the defendant’s obligations as a furnisher, citing the duty not to furnish information it knows or has reasonable cause to believe is inaccurate and the affirmative duty to update information furnished to a credit reporting agency to keep it accurate and complete. On information and belief, the defendant’s agreements with two of the national credit reporting agencies require it to report account information on a regular schedule, according to the complaint.
- The statement caused the plaintiff financial anxiety and worry about her credit report and interfered with her ability to get her financial affairs in order, according to the complaint. She also spent uncompensated time away from work and daily activities to confer with counsel about the collection effort.
The claims: The defendant is accused of violating Section 1692e of the FDCPA and its subparts, including Sections 1692e(2)(A), 1692e(5), 1692e(8), and 1692e(10), on the theory that representing that the plaintiff could be subject to negative credit reporting until the debt was paid in full, and that her monthly payments would not affect her credit score, was objectively false or materially misleading.
