Debt Collectors Must Heed Consumer Letters
The Seventh Circuit recently rejected a debt collector’s appeal to overturn several lower court decisions refusing to dismiss consumers’ lawsuits alleging the company incorrectly and unlawfully reported their debts as undisputed in violation of the federal Fair Debt Collection Practices Act (FDCPA). The consumers sued after a non-profit legal aid organization sent letters on behalf of each consumer to a debt collector stating the amount reported on the debt collector's earlier validation letters was “not accurate.” They accused the debt collector of violating the FDCPA when it failed to communicate the disputes about their debts to credit reporting agencies. The Seventh Circuit held the letters “disputed” the debt within meaning of the FDCPA. Also, as a matter of first impression, it found a debt collector's failure to inform a credit reporting agency the debtor disputed his or her debt will always be a material violation of the FDCPA.