Calling a Consumer a Liar Grounds for Continuing FDCPA Case

A U.S. district court earlier in April ruled that when a debt collector accused a debtor of lying during a telephone call, it was sufficient to continue a case for a claim under the harassment and abuse provisions of the Federal Debt Collection Practices Act (FDCPA).

The District Court for the Eastern District of Michigan denied the defendant’s motion to dismiss in Summers v. Merchants & Medical Credit Corp.  The plaintiff alleged that a collector with defendant Merchants & Medical, during a collection call, accused her of “not being honest” and accused her of “lying” about not working as a massage therapist. Summers also alleged the collector threatened to turn the account over to an attorney if she did not pay, according to the Consumer Finance Litigation blog of law firm Burr & Forman.

The Complaint alleged violations of the harassment and abuse provisions of the FDCPA (15 U.S.C. § 1692 et seq.), claiming that the collection agency engaged in “unfair debt collection practices when communicating with her to collect the debt” owed to Merchants & Medical’s hospital client.  The company filed a Motion to Dismiss for failure to state a claim under Rule 12(b)(6).

In considering the motion to dismiss, District Judge Terrence G. Berg indicated that although the Federal District Courts appeared to be “split on whether merely calling someone a ‘liar’ gives rise to a valid claim under § 1692d,” he decided against dismissal, writing “because some courts have found that calling a debtor a ‘liar’ could make out a claim for harassment under § 1692d,” the complaint’s allegations were sufficiently plausible to state a valid claim for relief.

The case will now proceed to discovery, per Berg’s order.

Berg did, however, dismiss Summer’s claims under the Michigan Collections Practices Act, which the defendant had stipulated to dismiss.