District Court rules “informational harm” does not create standing in FDCPA case

Courts FDCPA Debt Collection Consumer Finance Class Action

On April 6, the U.S. District Court for the District of Connecticut granted a defendant law firm’s motion for judgment on the pleadings in a putative class action, ruling the plaintiff lacked standing to bring a claim for abusive debt collection under the FDCPA. The plaintiff incurred a debt that was placed with a collection agency. The collection agency sent the plaintiff a letter, to which the plaintiff sent three letters disputing the debt and requesting validation of the debt as well as the agency’s authority to collect on the debt. According to the plaintiff, she never received the requested verification. The original creditor eventually hired the defendant to collect the debt. The defendant sent its own letter enclosing verification of the debt. The plaintiff sued alleging the defendant’s letter violated Section 1692g(b) of the FDCPA, which requires debt collection efforts to cease after timely dispute of a debt until the debt collector provides verification of the debt to the debtor. According to the plaintiff, her previous requests for validation triggered obligations under Section 1692g(b) with respect to the defendant, thus obligating the defendant to cease collection efforts until the validation information was provided to the plaintiff. She also asserted violations of Section 1692(e) on the grounds that an attorney did not meaningfully review her file before the defendant’s letter was sent. The defendant moved for judgment on the pleadings on two grounds: lack of standing and failure to state a claim that defendant violated the FDCPA.

The court agreed with the defendant that the plaintiff failed to show an injury-in-fact, as required for Article IIII standing, and instead only alleged informational harm including confusion caused by the defendant’s letter. The court held that confusion is not a legally cognizable injury and found that the plaintiff lacked standing because she did not suffer a cognizable injury.