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Financial Services Law Insights and Observations

D.C. Circuit says consumer failed to show injury in FDCPA action

Courts Appellate FDCPA D.C. Circuit Debt Collection Spokeo

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On June 9, the U.S. Court of Appeals for the D.C. Circuit vacated the district court’s judgment in favor of a consumer, concluding that the consumer failed to demonstrate a concrete injury-in-fact traceable to the FDCPA violations she alleged. According to the opinion, the consumer brought the putative class action against the debt collector after the collector sued the consumer to collect an outstanding auto loan debt. The collector allegedly used affidavits in its lawsuit against the consumer that were signed by an agent of the collector, not by an employee as attested. As requested by the debt collector, the action was then dismissed with prejudice. Subsequently, the consumer filed the putative class action against the debt collector and its agent alleging various violations of the FDCPA. The defendants moved to dismiss the action, which the district court denied. Subsequently, the district court granted their motion for summary judgment, concluding that any “any falsehoods in the [] affidavits were immaterial—and thus not actionable—because they ‘had no effect on [the consumer]’s ability to respond or to dispute the debt.’”

On appeal, the D.C. Circuit disagreed with the district court, concluding that the consumer lacked standing to sue the defendants altogether. Specifically, the appellate court held that the consumer failed to identify a traceable injury to the “false representations” made in the affidavits, citing to the fact that the consumer “testified unequivocally that she neither took nor failed to take any action because of these statements.” Moreover, citing to the U.S. Supreme Court decision in Spokeo, Inc. v. Robins, the appellate court emphasized that “[n]othing in the FDCPA suggests that every violation of the provisions implicated here…create[] a cognizable injury.” The appellate court vacated the district court’s judgment and remanded the case with instructions to dismiss the complaint.

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