Summary
This Seventh Circuit opinion reverses a district court's grant of summary judgment in favor of a debt collector under the Fair Debt Collection Practices Act (FDCPA). The court held that the plaintiff had Article III standing because the failure to report a disputed debt to a credit bureau constitutes a concrete reputational injury analogous to defamation. Additionally, the court found a genuine issue of material fact regarding whether the debt collector knew or should have known the debt was disputed, particularly given conflicting evidence about its understanding of unresolved disputes during the purchase of the debt bundle. The case is remanded for further proceedings consistent with this decision.
Topics
Practice areas
Questions Presented
- Whether Wood has Article III standing to sue under the FDCPA.
- Whether SCS knew or should have known that Wood disputed the debt, thereby violating §1692e(8) of the FDCPA.
- Whether the bona fide error defense is available to SCS.
- Whether the district court erred in granting summary judgment for SCS.
Holdings
- Wood has standing because the false reporting of a disputed debt causes a concrete, particularized injury sufficient for Article III standing.
- There is a genuine issue of material fact as to whether SCS knew or should have known about the dispute; therefore, summary judgment was improper.
- The bona fide error defense does not apply because SCS’s alleged error was a mistake of law, not a clerical or factual mistake.
Key quotations
“We conclude that Wood has standing and that there are genuine issues of material fact. Therefore, we reverse and remand for further proceedings consistent with this opinion.” (at 1154)
Factual background
Michael Wood incurred credit card debt with Pentagon Federal Credit Union (PenFed), disputed the debt in writing, and PenFed reported the debt as valid to credit bureaus. PenFed sold the account to Security Credit Services, LLC (SCS), which reported the debt to credit bureaus without indicating the dispute. Wood sued SCS under the Fair Debt Collection Practices Act (FDCPA).
Procedural history
The district court granted summary judgment for Security Credit Services, LLC. Wood appealed the decision.
Remand instructions
The case is remanded for further proceedings consistent with this opinion.