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Financial Services Law Insights and Observations

District Court rules in defendants’ favor regarding third-party disclosure

Courts Third-Party Debt Collection FDCPA

Courts

On August 25, the U.S. District Court for the Eastern District of Missouri granted a motion for judgment on the pleadings in favor of a defendant debt collector over a plaintiff alleging FDCPA violations. The plaintiff, a bankruptcy attorney who represents consumers in connection with discharging their debts, received a letter from defendant that disclosed a debt for a consumer he did not represent and has never represented. The plaintiff sued under the FDCPA, claiming that the defendant, among other things, engaged in abusive, deceptive, and unfair debt collection practices when defendant disclosed the existence of this third-party debt to the plaintiff by contacting him via letter. The plaintiff alleged that he was injured and suffered damages “due to the time Plaintiff had to spend trying to learn why he was being contacted and whether he had ever represented Plaintiff.” However, the court held that because the plaintiff was not a “consumer” under the FDCPA, he did not have standing to bring the FDCPA case. In so ruling, the court noted that the U.S. Court of Appeals for the Eighth Circuit has not yet ruled on whether the FDCPA “applies to persons other than a consumer[‘]” but agreed “with the greater weight of authority that concludes” only consumers have standing to bring such actions.

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