Kevin Woods v. LVNV Funding, LLC
27f4th544
| 7th Cir. | 2022Background
- In March 2018 an American Airlines/Citibank card was opened in Kevin Woods’s name and used for a single one‑way $377.61 flight; by October the balance was $723.55 and the account was sold to LVNV and placed for collection with Resurgent.
- Woods contends he is an identity‑theft victim; he first disputed the debt with Resurgent in early 2019 and sent an identitytheft.gov form.
- Resurgent repeatedly verified the account to Woods and to credit reporting agencies (CRAs), attaching an account summary and later the final statement showing an old Tipton, IN address.
- Woods filed a police report ( June 6, 2019); the CRAs routed his dispute (with the police report) to Resurgent via an ACDV, and Resurgent again verified the debt.
- Woods sued under the FDCPA and FCRA on August 14, 2019; after suit Resurgent requested more documentation and American Airlines later reversed and said the charge was not Woods’s, leading to removal from credit reports.
- The district court granted summary judgment for defendants; the Seventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the debt is a "consumer debt" under FDCPA §1692a(5) | The one‑time airline purchase is likely personal; a jury could find it was for consumer purposes | Plaintiff failed to prove the purchase was primarily personal; district court required more evidence | Court: jury could reasonably find it consumer debt; plaintiff met burden (so the FDCPA claim proceeds to merits) |
| Whether Resurgent violated FDCPA §1692e(10) by sending "false" collection letters | Letters asserting Woods owed the debt were literally false once AA later said it wasn’t his; that should trigger strict liability | Statements would not mislead the unsophisticated consumer; recipient reasonably would know he never opened the account | Court: §1692e uses the unsophisticated‑consumer standard; letters wouldn’t mislead such a consumer here, so no FDCPA violation |
| Whether Resurgent violated FCRA §1681s‑2(b) by failing to conduct a reasonable investigation after the ACDV | The ACDV and attached police report put Resurgent on notice of identity theft; matching name/address alone was insufficient | The ACDV also included police‑report commentary that AA had determined the purchaser was Woods; given that and Resurgent’s requests for more proof, its investigation was reasonable | Court: Given the ACDV’s content and Woods’s failure to provide requested documents, Resurgent’s investigation was reasonable; no FCRA violation |
Key Cases Cited
- Burton v. Kohn Law Firm, S.C., 934 F.3d 572 (7th Cir. 2019) (plaintiff bears burden to show debt is a consumer debt; transaction details may be probative)
- Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643 (7th Cir. 2009) (FDCPA §1692e judged by the effect on the unsophisticated consumer)
- Muha v. Encore Receivable Mgmt., Inc., 558 F.3d 623 (7th Cir. 2009) (statements actionable under §1692e if they would influence a consumer’s decision to pay)
- Westra v. Credit Control of Pinellas, 409 F.3d 825 (7th Cir. 2005) (reasonableness of furnisher’s investigation depends on the dispute details supplied by the CRA)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (furnisher’s procedures must be reasonable in light of the CRA’s description of the dispute)