The United States Court of Appeals for the Seventh Circuit recently reversed a district court’s decision dismissing a complaint and held that a plaintiff may have a claim under the Fair Debt Collection Practices Act (“FDCPA”) even if he denies owing the debt at issue. See Loja v. Main St. Acquisition Corp., 2018 WL 5077679 (7th Cir. Oct. 18, 2018). In the case, the defendant debt collector retained the defendant law firm to file a complaint against the plaintiff arising out of an unpaid credit card debt. Plaintiff denied owing the debt and that lawsuit ultimately was dismissed. Plaintiff then brought this action under the FDCPA alleging that the defendants continued pursuing a lawsuit against him even after being informed that he was not obligated on the debt at issue. Under the FDCPA, a “consumer” is defined as one who is “obligated or allegedly obligated to pay any debt.” Based on this definition, the district court dismissed the complaint, holding that plaintiff did not have standing to bring the action as long as he denied owing the debt because he was not “obligated or allegedly obligated” on the debt.
On appeal, the Seventh Circuit reversed, giving plaintiff leave to amend his complaint if necessary. The Court found that a plain reading of the FDCPA demonstrates that the phrase “obligated or allegedly obligated” did not require the plaintiff to allege he or she was obligated on the debt. Instead, “the definition of ‘consumer’ under the FDCPA includes consumers who have been alleged by debt collectors to owe debts that the consumers themselves contend they do not owe. This interpretation conforms to the structure and text of the rest of the FDCPA, which focuses primarily on the conduct of debt collectors, not consumers.” Based on this reading of the statute, the Court reversed and remanded.