Kentucky Court Dismisses Case Involving FCRA and FDCPA

August 21, 2023

A U.S. district court in Kentucky has granted a defendant a motion to dismiss a case concerning the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA). In this case, the plaintiff rented an apartment in Kentucky. However, the motion passed due to the case lacking personal jurisdiction.

According to the plaintiff, the apartment complex kept her security deposit after she moved out. It also notified her that she owed $330 for cleaning costs. The plaintiff later discovered that a residential screening company included this apartment debt in her credit report. Though the plaintiff disputed it, the defendant informed her that the apartment complex validated the account and sent it to a collection agency.

As a result, the plaintiff sued for damages. However, the defendants moved to dismiss the case, claiming it lacked personal jurisdiction. They explained that the only contact made with the plaintiff involved written responses to the plaintiff’s inquiries. Furthermore, these responses provided information only.

According to the case, the defendants included a debt collection and a residential screening company based in Texas. The apartment manager hired these companies to collect the debt and report it to the national consumer reporting agencies.

The court studied whether the Kentucky long-arm statute applied to the defendants due to the prong for transacting business in the state. The plaintiff claimed they transacted business in Kentucky because one defendant sent her letters attempting to collect the debt. However, the court disagreed with this argument.

It clarified that the plaintiff received one letter unrelated to her inquiries. The court found the one letter insufficient as a basis for the action, as the plaintiff filed the complaint two years after receiving the letter. However, the plaintiff continued to argue her point against the defendants.

For example, the plaintiff argued that the court had jurisdiction under the FCRA. She claimed the defendant furnished information to the national consumer reporting agencies in an attempt to collect a debt in Kentucky. She also explained that the defendant provided defamatory credit information.

According to her argument, the defendants knew this information would get republished in the state. As such, they willfully harmed her in Kentucky. The court disagreed with this dissertation. The plaintiff failed to specify the provision in the Kentucky long-arm statute that supported this argument. She also did not cite any recent case laws to support her theory. 

Though the plaintiff failed to prove her case, companies should ensure they comply with the FCRA and other background-checking regulations. Working with a background screening company is the best way to maintain compliance. The right partner will provide accurate and compliant reports, ensuring companies make informed decisions.

JDP makes background checks easy and reliable. Speak with a compliance expert today.