The District Court for the Northern District of Ohio denied defendant JTM Capital Management, LLC’s motion to dismiss consumer plaintiff Carolyn Holloway’s Fair Debt Collection Practices Act complaint in Holloway v. JTM by ruling that JTM’s inquiry into Holloway’s consumer credit report qualifies as an attempt to collect a debt because JTM sought information for the purpose of collection, and thus violated the FDCPA because the debt was nonexistent. The Court’s ruling is an example of a third-party communication with a credit reporting agency that violates the FDCPA.
Holloway alleged JTM violated the FDCPA by attempting to collect a debt discharged in bankruptcy, even though JTM did not directly communicate with her and the FDCPA permits communications with credit reporting agencies. Thus, the main issue is whether communications to third parties such as the credit reporting agencies can qualify as conduct in violation of the FDCPA.
JTM argued that its inquiry to a credit reporting agency about the status of Holloway’s debt is not actionable under the FDCPA because it was not an attempt to collect a debt. The Court disagreed in ruling that, while the FDCPA allows communication with a credit reporting agency if permitted by law, JTM’s communication was not permitted by law because the information sought was for the purpose of collection of a debt that did not exist anymore.