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Seventh Circuit Holds Debt Alleged by Collector Sufficient for “Consumer” under 1692a(3)

Link: LOJA v. MAIN STREET ACQUISITION CORPORATION, No. 17-2477 (7th Cir. 2018).

Basic Facts: Main Street filed a lawsuit against Mr. Loja for credit card debt in small claims court—and lost, on the basis that the debt did not belong to him. He then filed an FDCPA case against the debt collectors on the basis they sought to collect a debt that he didn’t owe. It isn’t clear if it was the wrong “Martin Loja,” and for the panel, it didn’t matter.

The district court (Judge Milton Shadur) dismissed the lawsuit sua sponte based on the requirement that an FDCPA claim be brought by a “consumer” under § 1692a(3) which defines such as “any natural person obligated or allegedly obligated to pay any debt.” The district court reasoned that since the Plaintiff didn’t allege the debt was his, he can’t be a consumer for purposes of the Act.

In an opinion authored by Judge Brennan, the panel disagreed, finding that if either the consumer or the debt collector alleges that the Plaintiff owed a debt, they satisfy the definition:


Significantly, the text of 15 U.S.C. § 1692a(3) 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. We therefore hold that 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. This interpretation conforms to the structure and text of the rest of the FDCPA, which focuses primarily on the conduct of debt collectors, not consumers. Keele v. Wexler, 149 F.3d 589, 595 (7th Cir. 1998) (noting that the language of the FDCPA “focuses primarily, if not exclusively on the conduct of debt collectors, not debtors”).

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