Credit reporting (regardless of error) and other servicing tasks were not attempts to collect a debt under the FDCPA.

In Green v. Specialized Loan Servicing, LLC, No. 15-CV-513-JDP (W.D. Wis. Jan. 18, 2017) the court granted summary judgment on Plaintiff’s FDCPA claims because, despite the fact that some of the communications contained errors, including that Plaintiffs’ were past due on their loans, the purpose of the communications were not to collect a debt and therefore did not fall under the FDCPA.

In Green the plaintiffs’ were foreclosed following the bankruptcy discharge that extinguished their obligation on a deficiency. Servicing of the loan was later transferred to defendant who collects debts, but also performs other administrative tasks, such as providing tax information and answering questions about the status of transferred loans.

Three written communications form the basis for the plaintiffs’ FDCPA claims in this case: a Notice of Servicing Transfer; a credit report, which was sent to a creditor with whom plaintiffs were trying to obtain credit; and a “verification of mortgage” which was faxed to the creditor. Defendant moved for summary judgment arguing that it was not intending to collect anything on the plaintiffs’ debt when it sent these communications. It was merely dispatching the other duties of a loan servicer, such as providing the appropriate tax notices. The court granted summary judgment.

Regarding the service transfer Notice, the court considered the factors elucidated in Gburek v. Litton Loan Servicing LP, 614 F.3d 380 (7th Cir. 2010) and concluded that the communication was not made in connection with a debt. The Notice did not demand payment, did not list an amount owed, and included a bankruptcy disclosure in bold capital letters, which stated that if the plaintiffs’ had received a bankruptcy discharge, then the Notice was merely a status update. The court found that the purpose and context of the communication was that it was sent in accordance with the defendant’s legal obligations as a servicer, a fact which plaintiffs were unable to rebut.

As to the Credit Report, the court conceded that debt collectors can violate the FDCPA by reporting false information to credit agencies, but that did not happen here. While the information in the tradeline was false, or at least misleading, because it showed that Plaintiffs were past due on their home loan, and that the tradeline disrupted Plaintiffs’ application for a new loan, there was no evidence presented that the tradeline was connected to some effort by Defendant to collect on Plaintiffs’ discharged debt.

Finally, the Verification Fax was not an attempt to collect a debt either as the Plaintiffs’ creditor requested the Fax in response to Plaintiffs’ challenge to the tradeline. And even though the Fax stated that the minimum payment was $608.23 and that the next payment date was October 1, 2009, – six years in the past – makes it implausible that this was a demand for payment. It was a response to a request, not an attempt to collect a debt.