Seventh Circuit holds person who asserts he did not take out the debt is nonetheless a consumer under the FDCPA

In Loja v. Main Street Acquisition Corp., 906 F.3d 680 (7th Cir. Oct. 18, 2018), someone took out a credit card in the plaintiffs name and did not pay it. A debt collector sought to collect the debt from the plaintiff leading the plaintiff to file suit under the FDCPA.

Because the plaintiff claimed he did not owe any debt, the district court concluded he did not meet the statutory standing requirements. Plaintiff raised the possibility of amending the complaint to rectify the infirmity, but the court informed him that so long as he alleged he did not owe the debt, any amendment would be futile. The district court dismissed the suit because the plaintiff was not a qualifying “consumer” under the language of the FDCPA.

The Seventh Circuit reversed. The debt collector argued, like it did in the district court, that the plaintiff failed to sufficiently allege that the credit card debt was “for personal, family, or household purchases,” as required under the FDCPA. The plaintiff responded that he had alleged the debt was on a personal credit card, which was sufficient to meet this standard, adding that it would be impossible for him to allege additional details because he did not generate the underlying transactions.

The Circuit observed that the FDCPA’s definition of “consumer” as “any natural person obligated or allegedly obligated to pay any debt, is in the disjunctive thereby creating two categories of persons that qualify as consumers. A person who is “allegedly obligated to pay” is therefore covered by the statute, just as is a person who is “obligated” to pay, to avoid rendering the phrase “or allegedly obligated” superfluous.

Further bolstering this interpretation is the fact that the FDCPA does not limit “alleged” to obligations alleged by the consumer. The word applies generally and consequently includes obligations alleged by a debt collector as well. Thus, the definition of “consumer” under the FDCPA includes consumers who have been alleged by debt collectors to owe debts that the consumers themselves contend they do not owe.

The plaintiff should also be given leave to amend his complaint because he preserved for the record that he would have sought leave to amend had the court not pronounced it futile. The Seventh Circuit’s interpretation of the FDCPA negates this futility.


  • James Noonan

    Jim is a founding partner of Noonan & Lieberman. Jim has more than 25 years of experience in civil litigation on behalf of creditors, servicers, business and real estate owners.

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