Claims of Debt Collector Abuse Continue to Fail in Court

John Rossman

Consumer lawsuits alleging abuse by debt collectors continue to increase.  Often these claims of collector abuse are premised on the assertion that a debt collector is seeking to collect an invalid amount or collect from the wrong person.  While debt collector abuse of a consumer is never acceptable, such claims – like any claim asserted in Court – must be substantiated by the consumer.

A Federal District Court recently agreed with several previous Courts in ruling that a consumer cannot assert Fair Debt Collection Practices Act (FDCPA) claims alleging collection on an invalid debt if the consumer fails to previously disclose the dispute.

Recent Ruling Affirms that Consumer Must Dispute Debt Before Bringing FDCPA Action

In the case of Carpenter v. RJM Acquisitions, LLC, the Federal Judge held that a consumer could not maintain an FDCPA lawsuit premised on a previously undisclosed dispute regarding a debt.  In its ruling, the Court agreed with the holding of the 8th Circuit Court of Appeals in Richmond v. Higgins and granted the debt collector’s motion to dismiss, writing:

A consumer cannot circumvent the statute’s procedural device to dispute the validity of a debt by filing an action pursuant to §1692e on the sole basis that the debt is invalid.

Court Rules Allow for Dismissal of Some Unsubstantiated Claims

Moss & Barnett, P.A. defended the debt collector in the Carpenter matter and utilized the often underused procedural device of a 12(c) motion to dismiss, also called a Motion for Judgment on the Pleadings. In Carpenter, the Court considered an affidavit and exhibits submitted by the debt collector in connection with the motion, holding that these documents were “necessarily embraced by the pleadings.”

When faced with sparse or conclusory allegations in an FDCPA complaint, a Motion for Judgment on the Pleadings allows the debt collector a limited opportunity to interpose an Answer and potentially other information for consideration by the Court early in the case without the need to engage in lengthy and costly discovery.

Conclusion

The rulings in Richmond v. Higgins and Carpenter affirm a consumer’s duty to disclose a dispute regarding a debt before repairing to Court to seek FDCPA damages.  Further, the Carpenter case demonstrates the ability of a debt collector to obtain an early dismissal of an FDCPA lawsuit where it is premised on conclusory or unsubstantiated allegations.

John K. Rossman is a shareholder and Chair of the Creditors’ Remedies Practice Group at Moss & Barnett, P.A. Mr. Rossman is a nationally acclaimed authority on the Fair Debt Collection Practices Act and the labyrinth of laws that impact the debt industry. He is a counselor and advisor to national and international companies and noted for his intelligent, creative and successful representation of collection agencies, debt buyers, creditors and fellow attorneys in cases across the country.

This publication is provided only as a general discussion of legal principles and ideas. Every situation is unique and must be reviewed by a licensed attorney to determine the appropriate application of the law to any particular fact scenario. If you have a legal question, consult with an attorney. The reader of this publication will not rely upon anything herein as legal advice and will not substitute anything contained herein for obtaining legal advice from an attorney. No attorney-client relationship is formed by the publication or reading of this document. Moss & Barnett, A Professional Association, assumes no liability for typographical or other errors contained herein or for changes in the law affecting anything discussed herein.