Debtor’s Suit Over Collector’s Failure to Report Dispute Revived

Consumers who dispute debts can sue debt-collection companies over their failure to communicate disputes to credit reporting agencies as required by the Fair Debt Collection Practices Act, the Seventh Circuit said Wednesday.

The alleged reputational harm is a sufficiently concrete injury to confer standing, the U.S. Court of Appeals for the Seventh Circuit said.

The court reinstated a suit against Receivables Performance Management LLC, saying the “bona fide error” defense doesn’t shield the company because it didn’t take reasonable steps to prevent the reporting failure.

It affirmed dismissal of a separate suit against MED-1 Solutions LLC, saying MED-1 had sufficient ...