4th Circuit: Boosahda v. Providence Dane, LLC- Whether a debt is a "consumer debt" under the FDCPA

Summary: Providence Dane sued Boosahda in state court for $22,000.00 on a credit card debt assigned to Providence Dane from Chase and First USA.  Boosahda counterclaimed for violations of TILA.  After testifying at trial that he did not have any recollection of using or having a Chase or Fist USA credit card, Providence Dane attempted to have a paralegal testify that Providence Dane had obtained  credit card statements showing Boosahda was liable for this debt, but such testimony was excluded as hearsay and the complaint of Providence Dane was dismissed.  Boosahda’s TILA claims were rejected by the jury. Subsequently, Boosahda commenced a FDCPA claim against Providence Dane, who was granted  summary judgment as Boosahda failed to establish that these credit card debts (which he continued to insist he had no recollection of using) were not "consumer debts" as required by the FDCPA. Boosahda first argued that the mini-Miranda warning that Providence Dane included in collection letters ("Federal law requires us to advise that this communication is an attempt by a debt collector to collect a debt. Any information obtained will be used for that purpose.") constituted an admission that this debt was subject to the FDCPA.  The 4^th Circuit rejected this argument, holding that the term "consumer debt" is defined by the FDCPA, not by a disclaimer.  To hold otherwise would place a debt collector "in a conundrum, exposed to liability for both including the disclaimer and for omitting it."  Nor was Boosahda’s argument availing that by suing him individually, rather than as a business, Providence Dane recognized this as a "consumer debt."   Lastly, the 4^th Circuit rejected his argument that his testimony in the FDCPA trial that he definitely had not used these cards in a business capacity, conflicted with his testimony in the state court case that he could not recall using these cards. Commentary: Boosahda had also moved to strike the affirmative defenses of Providence Dane as insufficiently pleaded, likely on the Iqbal/Twombley theory of pleading.  Because the 4^th Circuit upheld the dismissal of his claims as described above, it declined to rule on this issue. For a copy of the opinion: Boosahda v. Providence Dane, LLC- Whether a debt is a “consumer debt” under the FDCPA.PDF