Seventh Circuit Reverses Judgment of District Court and Defines "Character" of a Debt

Messer Strickler is pleased to report that on February 7, 2019 the Seventh Circuit Court of Appeals reversed a judgment entered against its client, Medical Business Bureau (“MBB”). In its opinion, the Circuit found that the District Court erred in determining that that MBB had misrepresented the “character” of a debt in violation of section 1692e(2)(A) of Fair Debt Collection Practices Act (FDCPA) when MBB reported to a credit bureau that plaintiff had nine unpaid bills of $60 each to same creditor, rather than single unpaid bill of $540. The Circuit determined that (1) “character” of debt refers only to kind of obligation; and (2) number of transactions between debtor and single merchant does not affect genesis, nature or priority of said debt. Additionally, the Circuit found that MBB accurately informed the credit bureau that Rhone incurred her debt over nine transactions, and, if plaintiff’s argument was correct, report of single $540 debt to credit bureau, would be misleading and also violate FDCPA, since plaintiff did not owe $540 for any transaction.

Messer Strickler attorneys Katherine Olson and Nicole Strickler represented MBB in the appeal with the assistance of their friends at Bedard Law Group.