Reporting Negative Info is a Coercive Tool to Collect a Debt

Debt Collectors and Creditors Report Negative Information on Credit Reports in Order to Coerce Payment of Debts

You all know this. But it’s comforting that courts and other authorities recognize it as well:

“[R]eporting a debt to a credit reporting agency is ‘a powerful tool designed, in part, to wrench compliance with payment terms . . . .’” Sullivan v. Equifax, Inc., CIV.A. 01-4336, 2002 WL 799856 (E.D. Pa. Apr. 19, 2002). In Purnell v. Arrow Fin. Servs., LLC, 303 F. App’x 297 (6th Cir. 2008) the Sixth Circuit Court of Appeals “assume[d] without deciding that the reporting of the debt to Equifax constitutes a ‘collection activity’” under the FDCPA. Id. at 304, n.5. The Purnell Court relied on an opinion letter from the FTC that provides in pertinent part: “[D]ebt collectors use the reporting mechanism as a tool to persuade consumers to pay, just like dunning letters and telephone calls.” December 23, 1997, letter from Federal Trade Commission Attorney John F. LeFevre to Robert G. Cass. Accord Edeh v. Midland Credit Mgmt., Inc., 748 F. Supp. 2d 1030, 1035-36 (D. Minn. 2010) aff’d, 413 F. App’x 925 (8th Cir. 2011); Quale v. Unifund CCR Partners, 682 F. Supp. 2d 1274, 1279 (S.D. Ala. 2010); Rivera v. Bank One, 145 F.R.D. 614, 623 (D.P.R. 1993); Matter of Sommersdorf, 139 B.R. 700, 702 (Bankr. S.D. Ohio 1991); Semper v. JBC Legal Group, 2005 WL 2172377, *4 (W.D. Wash. 2005).

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