Debtor did not suffer an “informational injury” under FDPCA where she did not seek to compel debt collector to provide information she was legally entitled to receive

In Wolter v. Anselmo Lindberg Oliver, LLC, No. 16 C 4205 (N.D. Ill. Oct. 4, 2017) the U.S. District Court for the Northern District of Illinois held that a debtor did not suffer a an “informational injury” sufficient to establish standing where she did not seek to compel the debt collector to provide information she was legally entitled to receive.

The debtor in this case had been relieved of liability through a bankruptcy discharge on a debt which was secured by a reverse mortgage. The debt collector sent a letter advising debtor that the loan was in default, but that if she had been discharged in bankruptcy she would not be sued for a personal deficiency. However, the letter did not also advise her that she was not liable for a deficiency due to the fact she had a reverse mortgage. Debtor contended that by not also advising her of this fact meant the letter was false and deceptive under the FDCPA for it implied there was personal liability on the reverse mortgage.

In response to the debt collector’s argument that debtor could not have been misled by the addition of the bankruptcy statement in the letter, debtors argue that she suffered an “informational injury” simply by receiving the misleading and deceptive information, thereby impairing her ability to make intelligent choices about how to proceed. She, therefore, need not allege additional harm to establish Article III standing.

The court granted summary judgment to the debt collector on the basis that the debtor lacked standing. It was uncontested that the debtor was not misled by the letter. The debtor admitted the letter might imply she might be liable for a deficiency, but not if she had received a discharge in bankruptcy, which she had in fact received. She also testified she had no understanding of what the bankruptcy statement meant, so she could not have been misled.

The court disagreed that the alleged injury was an informational injury. One suffers and informational injury when he or she failed to receive information to which one is entitled. Debtor was not seeking to compel the debt collector to provide them with information. They did not allege that, after receiving the allegedly misleading letter, they requested defendant to provide them with information about whether they could be sued for a deficiency judgment and were denied such information. They therefore have not “failed” to obtain information, so they did not suffer an informational injury.

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