Florida Court Finds Materiality Needed for Date of Delinquency Claims Under FDCPA

On October 31, 2017, a federal judge in Florida reaffirmed a legal principal that only the material misrepresentations of a debt collector are actionable under the Federal Debt Collection Practices Act (FDCPA), 1692 et seq. by granting Defendant's motion for summary judgment. The case is Jimenez v. Trident Asset Management, LLC (Case No. 8:16-cv-01059, U.S.D.C., Middle District of Florida).  

The court issued an Opinion and Order, a copy of which can be found here. 

Background 

Plaintiff owed a debt to Verizon, that was subsequently sold to Orion Portfolio Services, LLC (Orion) and then placed with Trident Asset Management, LLC (Trident) for collection. Trident reported plaintiff's account to the three main credit reporting agencies (CRAs), supplying them with information Trident received from Orion, including the applicable date of delinquency. Trident was notified thereafter that the account was disputed wherein Trident deleted its tradeline with the CRAs. 

Plaintiff filed suit against Trident alleging violations of the FDCPA due to reporting false or misleading information to credit reporting agencies (CRAs). Plaintiff made two primary arguments: 

1. Plaintiff alleged that Trident reported to the CRAs using a false name; and
2. Trident reported the wrong date of delinquency to the CRAs. 

Trident moved for summary judgment. 

Editor’s Note: A motion for summary judgment is based upon a claim by one party (or, in some cases, both parties) that contends that all necessary factual issues are settled or so one-sided they need not be tried. The summary judgment is appropriate when the court determines there no factual issues remaining to be tried, and therefore a cause of action or all causes of action in a complaint can be decided upon certain facts without trial.  

The Court's Order

The court granted Trident's motion for summary judgment. 

In response to the first argument, Defendant stated plaintiff failed to prove that Trident reported a false name and they further countered that they do not control how the information is disseminated once it is given to the CRAs. The court agreed and stated that even if Defendant reported a false name, which plaintiff failed to prove, the name that appeared on the credit report would not confuse or mislead the least sophisticated consumer and therefore not actionable under the FDCPA.

As to the second argument that Trident incorrectly reported the date of first delinquency, defendant argued that Orion supplied the date of delinquency and Trident reported only what information was supplied to them and thus did not knowingly misrepresent the date. 

The court found that while an alleged misrepresentation of the date of first delinquency is a question of fact, the plaintiff must still show they were materially misled by the misrepresentation. After finding that material misrepresentation means that it influences a consumer’s decision or ability to pay or challenge a debt, here the court found the plaintiff offered no such evidence. 

Because the plaintiff disputed the debt, and the debt was deleted three months later, the plaintiff could not argue that the first date of delinquency had any impact on her ability to pay or challenge the debt. 

Ron Cantor with the Law Offices of Ronald S Canter, LLC represented the defendant, along with of counsel John H. Bedard from Bedard Law Group. In response to the decision, John said: “This decision helps all debt collectors who are also furnishers. The court reaffirms an important legal principal that only the material misrepresentations of a debt collector are actionable under the FDCPA.” 

insideARM Perspective

This case is a big win on a number of levels. First, as mentioned by John Bedard in his quote, another court has held that a misrepresentation by a debt collector must be material to be liable under the FDCPA. Second, the world of credit reporting is tough already, including the analysis required to determine the first date of delinquency. This ruling underscores the importance for ARM companies that are credit reporting to have thorough policies and procedures to review disputes and properly update tradeline information.