On October 23, the U.S. District Court for the Eastern District of Washington denied a defendant debt collector’s motion to dismiss a class action claim brought under the Fair Debt Collection Practices Act based on the debt collector’s alleged failure to report a debt as disputed in violation of FDCPA § 1692e(8).  The Court in Patterson v. Peterson Enterprises, Inc. ruled that the plaintiff had alleged facts indicating she had disputed the credit account, and the debt collector’s failure to communicate the disputed status may be a material violation of FDCPA 1692e.

Plaintiff Latalia Patterson claimed she defaulted on her child’s medical debt due to a failure by her healthcare providers to bill her insurer.  After Peterson Enterprises filed suit to collect upon the debt, Patterson disputed the credit account in her answer and in opposition to summary judgment. She then filed a class action claiming that Peterson Enterprises violated FDCPA Section 1692(e) by failing to communicate the disputed status of the debt to the credit bureaus.

A debt collector may violate § 1692e(8) of the FDCPA by “failing to communicate that a disputed debt is disputed.”  In order to state a claim, a plaintiff must plead facts indicating that she has disputed the debt and that the collector’s false or misleading reporting is material.  The Court in Patterson reasoned that the plaintiff had disputed the underlying debt by denying liability in response to the debt collector’s lawsuit.  Furthermore, the District Court relied on a 2008 decision from the Eighth Circuit (Wilhem v. Credico, Inc.) to hold that a defendant’s failure to inform a credit bureau of the dispute “is always material.”  Accordingly, the court denied the debt collector’s motion to dismiss.