In 2020, two plaintiffs tried to sue Midland and then failed in the Trichell VS Midland credit management. Midland credit management is another entity of Encore, similar to Midland funding.
Background to the case
The first plaintiff, John Trichell, defaulted on $43,000 in credit card debt. He received a letter from Midland credit management that stated that he qualified for every payment plan, making him pre-approved. The letter encouraged Trichell to ‘act now’ to maximize his savings. The debt was time-barred under Alabama law, six years; Trichell had not made any payments for six years. The letter also included the disclaimer that Trichell could not be sued. The last part is to be highlighted as the debt collector had explicitly informed him.
Since the letters contained the time-barred disclaimers and the disclaimer that the debt would not be reported to credit bureaus as it was time-barred, Midland had fulfilled their duty by disclosing the information to the consumer. However, this was not what Trichell was suing for. The second plaintiff, Keith Cooper, received the same letter on a similar type of debt. He is a resident in Georgia.
Both of the plaintiffs bought the case against Midland for violating the Fair Debt Collection Practice Act (FDCPA). According to their claim, the letter was misleading, although they were also alleging a violation. Trichell claimed that his letter said that he could be sued, and the account would be reported to a credit bureau. He misread the letter entirely and claimed the opposite. On the other hand, Cooper felt mislead because his letter did not inform him that if he made a partial payment towards the debt, the years would increase, and the statute of limitations would start over. This particular mix up of information could have been cleared up over a phone call, as unsophisticated consumers would not have been aware of this law.
Cooper’s argument has a little more clout than Trichell’s; however, the District Court dismissed both claims. The case was then appealed and taken to the 11th circuit.
Appeal
The 11th circuit judge declined to consider both claims and mentioned that neither Trichell nor Cooper showed a concrete proof of injury, which was required by Article III. Plaintiff’s injury claims were as follows;
- The letters could harm unsophisticated consumers.
- The letters were information injury because they feel they have a right to receive the truth in the communication from debt collectors.
There are remedies for violating the FDCPA and the Fair Credit Reporting Act (FCRA), which goes up to $1000 per infraction. This is what the federal bureaucracies allow for if there is a violation. But if the consumer wants to take it a step further and wants to sue them for more, the consumer has to prove injury.
The 11th circuit judge dismissed the claims as they failed Article III standing via the following;
- The 1st injury has nothing to do with the plaintiffs. The plaintiffs have to show how they were injured.
- The 2nd injury was denied because the court found that any risk of damage would have dissipated by the time the case was filed, and there would be no evidence of being at future risk by the information provided.
The plaintiffs did not provide any substantial evidence regarding any payments made, nor if they wasted time in considering to make the payments. They only alleged bare minimal violations of the FDCPA. The plaintiffs were unable to prove how they were ‘worse off’ than before.
The 11th circuit dismissed informational injury because the FDCPA does not have an entitlement to receive any information from debt collectors.
As a result, neither the plaintiffs won, nor Midland.
What does this mean?
Consumers need to be educated on bureaus’ violations as to what constitutes a violation and what does not. The questions that need to be answered before filing a lawsuit are; how is the consumer being damaged? How does the consumer compute monetary damages from how they were affected here? A consumer can sue anyone for any reason; there is proper evidence required, though.
At the end of the day, whatever the lawsuit’s outcome is, the attorneys always receive their money. Hence, the education of attorneys is critical as well, especially for FDCPA and FCRA attorneys.
In most cases, Midland is being sued for conducting malpractices in dealing with their clients. But there are a few cases such as this one where consumers claim injury, without providing concrete evidence and expect to be handed their dues. If you, as a consumer, want to sue a debt collector for violations or injury, you have to make sure there is enough evidence to prove you right in court in front of a judge.