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FDCPA Case 7th Cir. Holds No Standing Without Detrimental Reliance

  • Written by Steel Rose

The U.S. Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a consumer’s claims under the federal Fair Debt Collection Practices Act (FDCPA) for failing to sufficiently allege a concrete injury to confer standing under Article III.

Consistent with its string of recent decisions addressing Article III standing for claims under the FDCPA, 15 U.S.C. § 1692, et seq., the Seventh Circuit concluded that the consumer’s mere claims that a collection letter instructed her that a dispute of her debt must be in writing did not allege sufficient injury, because she did not try to show how a dispute would have benefitted her.

A copy of the opinion in Smith v. GC Services Limited Partnership is available at: Link to Opinion.

A consumer received a letter from a debt collector that included the statement: “If you dispute this balance or the validity of this debt, please let us know in writing. If you do not dispute this debt in writing within 30 days after you receive this letter, we will assume this debt is valid.”

The consumer filed suit in federal court alleging that the letter’s instructions for a consumer to put their dispute in writing failed to comply with subsection 1692g(a)(3) of the FDCPA, arguing that a consumer is entitled to choose how to dispute a debt. See 15 U.S.C. § 1692g(a)(3) (requiring that a debt collector send each consumer “a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.”).

When the case first came to the Seventh Circuit, the appellate court held that the debt collector had waived or forfeited its right to arbitration. The trial court later dismissed the suit on remand, holding that the consumer failed to allege injury to confer Article III standing, relying principally upon Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), and Casillas v. Madison Avenue Associates, Inc., 926 F.3d 329 (7th Cir. 2019).

This appeal followed. To read more click here