The Eighth Circuit Court of Appeals recently decided a case involving a debt collector that had verified the existence of a debt in response to a consumer reporting agency’s inquiry, even though the debtor had allegedly disputed the debt to the same reporting agency. The Eighth Circuit affirmed the lower court’s ruling that the debtor had failed to show that the collector’s communications with the reporting agency had violated the Fair Debt Collection Practices Act, and in doing so, addressed for the first time in the Eighth Circuit what constitutes a communication “in connection with the collection of any debt.”
More specifically, the debtor alleged that the collector’s failure to disclose the disputed nature of the debt in response to the reporting agency’s inquiry was proscribed by the FDCPA as “false, deceptive, and misleading” and done “in connection with the collection of any debt.” The Court dispensed with the first issue by analyzing the communication’s effect on its recipient – the credit reporting agency. Because the debtor herself had already reported her dispute to the reporting agency, the Court held that the agency could not possibly have been deceived or misled by the collector’s failure to note the dispute when it verified the debt’s existence.
The second question of whether the communication between the collector and the reporting agency was “in connection with the collection of any debt” was one of first impression for the Eighth Circuit. Given the opportunity to define this phrase for the first time, the Court held that a communication was made “in connection with the collection of any debt” where the “animating purpose of the communication” was to induce the consumer to pay the debt. While acknowledging that there were instances in which communications from a debt collector to a reporting agency would meet this standard, the Court held that in this instance, the “animating purpose” of the communication from the collector to the reporting agency was not to collect on the debt, but rather to assist the agency in its reinvestigation obligations under the Fair Credit Reporting Act.