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Appeals Court: Debt collectors' false statement must be relevant

Picture this: someone is driving through Cincinnati on I-71 at 100 mph and is pulled over by police. Using driver's license information, the officer writes a speeding ticket, including the driver's weight listed at 180 lb. on the license. Do you think a court would toss out the speeding ticket because it turns out that the driver actually weighs 185? Of course not. The person's weight is immaterial; the speeding offense had nothing to do with the listed weight.

That same sort of common sense prevailed in a recent case before the United States Court of Appeals, Third Circuit. The court ruled that a false statement made by a debt collector to a debtor must be material -- must be relevant -- in order for the debtor to take legal action against the collector under the Fair Debt Collection Practices Act (FDCPA).

The FDCPA lists a wide array of impermissible types of misrepresentations in conversations and communications between collector and debtor -- and those continue to be prohibited. However, the court made clear that an immaterial statement -- such as an incorrect address or a misspelled company name or other immaterial information -- will not allow debtors to escape their financial obligations.

The court ruled that the false statement only becomes actionable if it could affect decisions about the debt by the "least sophisticated debtor." Let's go back to our driving illustration for a moment. Would the "least sophisticated driver" expect to have their speeding ticket dismissed because the ticket misstated the driver's weight? Of course not.

Could the "least sophisticated debtor" expect to have a debt forgiven because the county clerk's address was misstated on a document or because of a typo in a company's name? Again, no.

Hopefully, debtors harboring hopes of evading debts because of immaterial false statements will let go of those dreams and face up to their responsibilities without need for debt collection. If not, experienced Ohio debt collection attorneys are able to take effective actions to get payments for clients. Experienced attorneys will press debtors with pre-litigation collections, and vigorously pursue payment as well in litigation and post-judgment.

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