Is this yet another sign that the attack on standing has reached its tipping point? A District Court judge in Illinois has ruled that a plaintiff in a Fair Debt Collection Practices Act case has suffered a concrete injury based on the communication of inaccurate information to a credit reporting agency, which created an “intangible, reputational injury.” Even though the plaintiff did have standing, the judge did, though, grant the defendant’s motion for summary judgment, ruling it did not know or should have known that the debt was previously disputed with another creditor.
A copy of the ruling in the case of Wood v. Security Credit Services can be accessed by clicking here.
The plaintiff disputed a credit card debt with a credit union. The credit union responded to the dispute and informed the plaintiff that the debt was valid and would not be removed from the plaintiff’s credit report. The plaintiff never responded to the dispute verification letter. The credit union then reported the debt with the code “XH” to indicate it was previously disputed but the dispute had been resolved.
The debt was subsequently sold to the defendant. As part of the agreement between the defendant and the credit union, one of the terms of the sale is that none of the accounts being sold had unresolved disputes. The defendant began to report the debt to the credit reporting agencies but did not indicate the account was, or ever had been, in disputed, at which point the plaintiff filed suit.
The plaintiff used the ruling in Ewing v. Med-1 Solutions to argue he had standing to sue, and Judge Sara L. Ellis of the District Court for the Northern District of Illinois, agreed.
But regardless of whether the plaintiff had standing to sue or not, there was no way for the defendant to know that the debt had been disputed when it acquired it from the creditor, Judge Ellis determined. Because the plaintiff never responded to the creditor’s letter indicating it had investigated the dispute and was still going to continue furnishing information about the debt to the credit reporting agencies, the dispute was resolved, Judge Ellis ruled, using the ruling from Foster v. Afni.
The plaintiff has appealed the ruling to the Court of Appeals for the Seventh Circuit.
