Midland Funding Wins FDCPA Case

In the recent case of Huebner v. Midland Credit Management Inc., a federal judge for the United States District Court, Eastern District of New York granted summary judgment in favor of the defendants. The case arose out of a $131 balance on a Verizon bill and was filed as a putative Fair Debt Collection Practices Act class action suit.

In 2010, the plaintiff switched his phone service to Verizon and the company performed work on the plaintiff’s phone line to ensure that he had adequate service. As a result, plaintiff was billed $131 for the work done to his phone line. However, plaintiff argued that he should not have been charged this fee and refused to pay the bill. The outstanding debt of $131.21 was acquired by Midland Credit Management Inc. in July 2013. Midland sent the plaintiff an initial collection letter on August 9, 2013.

On October 17, 2013, plaintiff called Midland and recorded the entire phone call on a tape recorder. During the call he asked what he had to do to dispute the debt but refused to describe the debt to the collection agent when asked about the specifics of the dispute. The plaintiff’s answers caused collection agent to continue to ask more questions in an effort to find out what the problem was with the debt. The plaintiff never directly answered these questions.

Following the phone call, the plaintiff’s account was marked as deleted and Midland sent him a letter advising him that it had ceased collection efforts and instructed the Credit Reporting Agencies to delete the information reported by Midland about the account. The plaintiff’s account was coded as ‘289’ which meant that it was disputed and deleted. Six days later, Midland sent several requests to Experian, TransUnion, and Equifax asking them to delete the information about the plaintiff’s account. Midland made these requests three times after this to increase the likelihood that the agencies would comply with its deletion requests.

Plaintiff commenced this suit on October 15, 2014 alleging that Midland violated the Fair Debt Collection Practices Act by attempting to collect the $131 debt purchased by Midland from Verizon. The plaintiff alleged that Midland’s attempt to seek an explanation about the debt during the recorded phone call and its failure to report his debt as disputed, were both illegal. Specifically he alleged four violations of the FDCPA: (1) defendant violated the FDCPA by failing to report to the credit reporting agencies that his debt was disputed; (2) defendant violated the FDCPA by falsely representing that he needed to give a reason for his dispute; (3) the deletion letter violated the FDCPA because it was a false representation of the character of legal status of the debt; and (4) defendant violated the FDCPA because it falsely represented to him that he had a valid debt owed to Verizon and then attempted to collect upon the debt by making false representations about the debt’s validity.

Judge Cogan held that Midland acted in the manner in which it was supposed to under the FDCPA. Midland was held to have undertook proper action in this case and allowed plaintiff to dispute his debt, stopped collecting on the debt, and notified the credit reporting agencies. The defendant’s motion for summary judgement was granted based on the plaintiff’s inability to prove that Midland acted wrongly in attempting to collect the outstanding debt.


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