District Court (Ala.) Says FDPCA Plaintiff States 1692e(8) Claim For Collector’s Failure to Report Subsequent Report as “Disputed”

In Canady v. Kaps & Co. (USA) Ltd. Liab. Co., No. 4:20-CV-1253-CLM, 2021 U.S. Dist. LEXIS 148878, at *7-9 (N.D. Ala. Aug. 9, 2021), Judge Maze found that an FDCPA Plaintiff stated a 1692e(8) claim.

Kaps also argues that Canady’s complaint fails to state a claim under § 1692e(8) because Canady alleges that she disputed the debt only after Kaps first reported the debt to a credit reporting agency. Although acknowledging that Canady alleges that Kaps “last reported the tradeline reflected by the alleged Debt to [sic] June 23, 2020,” Kaps argues Canady fails to allege that Kaps communicated any other credit information about the debt at any time after April 23. (Doc. 17, p. 11).  The Federal Trade Commission’s (“FTC”) Staff Commentary on this provision of the FDCPA states: 1. Disputed debt. If a debt collector knows [*8] that a debt is disputed by the consumer, either from receipt of written notice (section 809) or other means, and reports it to a credit bureau, he must report it as di[s]puted.  2. Post-report dispute. When a debt collector learns of a dispute after reporting the debt to a credit bureau, the dispute need not also be reported. Whitehead v. Nationwide Recovery Serv., Inc., No. 1:18-CV-3670-TCB-JCF, 2019 U.S. Dist. LEXIS 229603, 2019 WL 8277269, at *5 (N.D. Ga. Dec. 2, 2019), report and recommendation adopted, No. 1:18-CV-3670-TCB, 2020 U.S. Dist. LEXIS 54998, 2020 WL 1467253 (N.D. Ga. Jan. 8, 2020) (quoting Staff Commentary on the Fair Debt Collection Practices Act, 53 FR 50097-02, 1988 WL 269068, *50106 (Dec. 13, 1988)). The Northern District Court of Georgia has interpreted this FTC commentary to “indicate[ ] that only if a debt collector reports a consumer debt to a credit bureau under Section 1692e(8) must he then also report that debt as disputed.” Whitehead, 2019 U.S. Dist. LEXIS 229603, 2019 WL 8277269, at *5 (citation omitted); See also Wilhelm, 519 F.3d at 418 (granting summary judgment for defendant debt collector where there was no evidence that the defendant failed to report an alleged debt as disputed after it learned of the plaintiff’s dispute). While a debt collector does not have to proactively amend its report after learning the debtor disputes the debt, “a debt collector violates § 1692e(8) if it [1] reports a debt to a credit agency, [2] learns of a consumer’s dispute of that debt, then [3] reports the debt to a credit agency again without disclosing the dispute.”Whitehead, 2019 U.S. Dist. LEXIS 229603, 2019 WL 8277269, at *5.  Canady does not claim that Kaps had an affirmative duty to reverse or amend its initial report to TransUnion after she disputed the debt. Rather, she alleges Kaps violated the FDCPA when it reported information about the alleged debt again to TransUnion on June 23rd—after she sent her dispute letter—yet did not report the debt as disputed. Based on the court’s analysis in Whitehead, and reading the facts in a light most favorable to Canady, Canady has sufficiently stated a claim under § 1692e(8).