The Southern District of Indiana recently issued a positive decision for debt buyers and collectors defending Fair Debt Collection Practices Act lawsuits premised on a directly communicating with a consumer who had previously notified the creditor she was represented by an attorney.
In Pennell v. Global Trust Management, LLC, No. 1:18-cv-01698-JRS-DLP, 2019 U.S. Dist. LEXIS 141827 (S.D. Ind. Aug. 20, 2019), the Court granted Global Trust’s motion for summary judgment after it was sued for allegedly violating the FDCPA because, while Pennell’s counsel sent the original creditor a notice that she was represented by an attorney, that information was not conveyed when the account was sold and subsequently collected on.
The Court rejected Pennell’s contentions that Global Trust, as a debt buyer, acquired all the rights and liabilities associated with Pennell’s debt by determining that “[k]nowledge… is neither a right nor a liability; it is ‘a state of mind.’” The Court explained, “[a] debt purchaser does not acquire the seller’s knowledge-or any other state of mind- any more than a homebuyer acquires the seller’s neighborly grudges or fond memories of last year’s block party.” The Court relied heavily on the Seventh Circuits decision in Randolph v. IMBS, Inc., 368 F.3d 726, 729 (7th Cir. 2004) (“the [FDCPA] asks what the debt collector knows, not what the creditor knows.”)