South-Western Legal Studies in Business

Credit Card Company Statements Could Be Basis of Emotional Distress

Appeals court held that while the Fair Debt Collection Practices Act and Truth in Lending Act did not apply to debt collection practices of a credit card company, there were sufficient allegations to allow a suit for emotional distress to proceed.


Consumer Protection

Key Words

Truth in Lending Act; Fair Debt Collection Practices Act; Emotional Distress; Suicide

C A S E   S U M M A R Y

Nina Kay MacDermid, who had a history of mental problems, took out credit cards in the name of herself and her husband without his knowledge. Due to a bankruptcy, she was supposed to live on a strict budget, but she got the cards, ran up large balances and, when that fact emerged, killed herself. Prior to that, the credit card companies had begun efforts to collect the debts, which she hid from her husband by using a Post Office box for mail. She told her psychologist that Discover threatened to prosecute the couple for credit card fraud. Her husband, Donald, who did not know of the cards until shortly before her suicide, sued Discover, which had issued her three cards with him as primary holder, for violating the Fair Debt Collection Practices Act (FDCPA), the Truth in Lending Act (TILA), and for infliction of emotional distress. The trial court dismissed the suit; Donald appealed.


Reversed in part; affirmed in part. Under TILA, the credit card company was not required to investigate the legitimacy of the address provided by Nina. The company could not know that Nina provided information about Donald without his knowledge and could not be expected to know about her scheme to keep him ignorant about the accounts. Similarly, the FDCPA does not apply because the credit card company is not a debt collector covered by the statute. It was attempting to collect the debt owed to it in its own name. However, the suit for intentional infliction of emotional distress may proceed. Discover told the MacDermids that it had notified local authorities and that the district attorney will “take a little trip out to your house.” There were other implications of criminal prosecution even though this is a civil matter. Nina had discussed this with her psychiatrist, who testified that she was preoccupied with that threat of criminal prosecution. As such, it will be determined at trial to determine if this was outrageous conduct that inflicted emotional distress that played a role in the suicide.


MacDermid v. Discover Financial Services, 488 F.3d 721 (6th Cir., 2007)

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