In Blackmon v. Ad Astra Recovery Services, an individual claiming to be Brittney Blackmon obtained a payday loan in her name and then never made a payment. The debt was subsequently assigned to defendant collection firm Ad Astra Recovery Services, Inc. (AARC). Years later, Blackmon contacted AARC by telephone to dispute the debt. Blackmon informed the AARC representative that she had discovered the debt on her credit report and believed that it was fraudulent. The AARS representative explained to Blackmon that, to have the debt removed from her credit report, she would need to provide either a police report detailing the fraud on the account or a completed, signed, and notarized fraud affidavit, along with a letter of dispute explaining why she believed the account to be fraudulent. The AARC representative further provided instructions to Blackmon for submitting the necessary documentation and invited her to call back if she needed additional assistance.
Following the call, AARC continued to report the debt to the credit bureaus but changed the status to “disputed.” The plaintiff never submitted a police report or fraud affidavit to AARC. Several months later, an attorney representing Blackmon submitted a formal written dispute of the debt to AARC, which responded with the verification required by the Fair Debt Collection Practices Act (FDCPA).
Blackmon then filed an action in the U.S. District Court for the Southern District of California, alleging multiple violations of the FDCPA. Specifically, the complaint alleged that, by continuing to report the debt after receiving notification of potential fraud, AARC had violated Sections 1692e (using false, deceptive, or misleading representations or means to collect a debt) and 1692f (using unfair or unconscionable means to collect a debt).
AARC moved for summary judgment, which the court granted, finding that “[n]one of AARS’s communications undermined [Blackmon’s] ability to intelligently choose her action concerning the loan account.” Analyzing the complaint’s allegations under Section 1692e, the court found that “[t]here was nothing about AARS’s statements that would confuse or mislead even the least sophisticated debtor’s attempt to remove the fraudulent account from their credit report.” Interestingly, in its analysis of Blackmon’s Section 1692f(1) claim that AARC had unlawfully attempted to collect a debt that she did not owe, the court noted that Section 1692f(1) “more aptly addresses the abusive practice of attempting to collect an amount greater than that which is owing — not an attempt to collect a debt from the wrong person.”
A copy of the order can be accessed by clicking here.