U.S. Seventh Circuit - The FindLaw 7th Circuit Court of Appeals Opinion Summaries Blog

Debt Collector Loses Appeal Over Disputed Debts

Debt collector, Portfolio Recovery Associates, recently lost their consolidated appeal in the Seventh Circuit seeking to overturn four summary judgment orders granted to four different claimants alleging violations of federal debt collection practices.

The violation each of the four debtors alleged involved their debts being reported to the credit reporting agencies without notice that the debt was disputed. The debt collector claims that the letters they received from the debtors did not clearly state that the debts were being disputed. Fortunately for the four debtors, the court of appeals didn't agree.

The Debt Collector Is in the Details

Interestingly, each of the four cases involved the same attorney, who happened to be a volunteer with The Debtors Legal Clinic, an Illinois non-profit organization. In each letter, it clearly states that the debtors can't afford to pay, do not believe the amount stated is accurate, and that any further communication should be through the attorney.

The debt collector did not dispute receiving the letters before reporting the debts to credit agencies, but did dispute that the letters raised a dispute as to the debt. It argued to the court that the letters were merely attorney representation letters, and not letters disputing the debt. The court rejected this argument by actually quoting Merriam-Webster dictionary definition.

In its appeal, the debt collector also argued that the claimants did not have standing to bring a claim under Fair Debt Collection Practices Act as they had not suffered a concrete harm, but a unanimous court rejected that argument as well.

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