### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No. 17

- 3408
D IANE R HONE , Plaintiff

- Appellee ,

v.

M EDICAL B USINESS B UREAU , LLC , Defendant

- Appellant

.

____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 16 C 5215

— Virginia M. Kendall , Judge

.

____________________
A RGUED S EPTEMBER 26, 2018

— D ECIDED F EBRUARY 7, 2019

____________________

Before W OOD , Chief Judge , and E ASTERBROOK and R OVNER , Circuit Judges

. E ASTERBROOK , Circuit Judge

. This case is about character

— the character of a debt. A debt collector must not make any “false representation” about “the character, amount, or legal status of any debt”. 15 U.S.C. §1692e(2)(A). A district cour t concluded that a debt collector misrepresented a debt’s “character” by reporting to a credit bureau that the debtor had nine unpaid bills of $60 rather than one of $540. We2 No. 17

- 3408

hold, to the contrary, that arithmetic does not affect a debt’s “char acter.” The statutory word “amount” rather than the word “character” is what governs reporting the debt’s size

. Diane Rhone received physical therapy from IllinoisBone and Joint Institute, which billed her $134 for each session. Insurance covered all but a $60 co

- pay per session. Rhone did not remit her part of the bills, however, and the Institute turned to the Medical Business Bureau for debt collection. After t hree years of dunning legers did not work, the Bureau rep orted to Equifax that Rhone owes nine debts of $ 60 each. That led to this suit, in which Rhone contends that the Bureau had to report the aggregate debt of $540 rather than nine $60 debts. Judge Der

- Yeghiayan agreed with that submission. 2017 U.S. Dist. L EXIS 177800 (N.D. Ill. Oct. 25, 2017). After he r etired the case was assigned to Judge Kendall, who imposed a $1,000 penalty. 2018 U.S. Dist. L EXIS 188433 (N.D. Ill. Apr. 27, 2018). The credit report was factually correct. Rhone incurred nine debts of $60 each. Judge Der

- Yeghiayan did not explain why the difference between 1 

### × $540 and 9 

### × $60 misrepresents the “character” of a debt. Neither the district judge nor Rhone offered a definition of the word “character.” Asked at oral argument whether a debt collector should report one debt, or two, if a person buys two cars from a single dealer and does not pay for either car , Rhone’s lawyer replied: “It would depend .” Counsel told us that a judge should consider “ all the facts and circum stances” once litigation is underway . Yet what a court (or for that mager a debt collector) needs is a rule of law to apply to those facts and circumstances. This is a statutory suit , not a comm on

- law action. The word “character” either requires aggregation of debtsNo. 17

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arising from multi ple transactions with a single entity , or it does not. The statute refers separately to the “charac ter” and the “amount” of a debt . Rhone does not contend that the Bureau misrepresented the “amount” of the debt by telling Equifax that Rhone owes $60 for each of nine medical treatments

. We can imagin e a regulation specifying whether debts to a single creditor should be aggregated (or perhaps reported both singly and in the aggregate)

— consistency contributes to clarity

— but Rhone does not point to such a regulation, nor could we find one. O ne benefit of identifying each amount separately is that a debtor then can identify exactly which transactions are at issue. If the Bur eau had reported one $540 debt , Rhone might well have asserted that the report was misleading

— after all, she does not owe $540 for any transaction

. Per

- transaction reporting also shows whether some of the debts are stale (that is, whether the statute of limitations bars collec tion ). Consumers and credit bureaus alike may find that information valuable. A search through decisions from thi s court and the other courts of appeals did not turn up any discussing whether aggregation (or not) of all amounts owed to a single creditor

concerns the “character” of a debt. Indeed, few decisions discuss the meaning of that word in any debt

- related cont ext. In this circuit, Fields v. Wilbur Law Firm, P.C. , 383 F.3d562 (7th Cir. 2004), holds that presenting a debt plus agorneys’ fees as a single undifferentiated sum misstates the debt’s character , while Hahn v. Triumph Partnerships LLC , 557 F.3d 755 (7th Cir. 2009), holds that combining principal and interest does not do so. Agorneys’ fees differ in character from the main debt, while interest does not. Elsewhere,4 No. 17

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Donohue v. Quick Collect, Inc. , 592 F.3d 1027, 1033 (9th Cir. 2010), agr ees with Hahn , while Miller v. Javitch, Block & Rathbone , 561 F.3d 588, 592

– 94 (6th Cir. 2009), holds that describing a debt as a loan rather than an account receivable does not misstate its character . None of these decisions holds or im plies that it mage rs to a debt’s “character” whether amounts due for individual purchases from a single merchant are stated separately or as a total. The absence of authoritative or even persuasive guidance leaves us on our own. To our ears, “character” sounds like a refere nce to the kind of obligation . (That is essentially how Fields heard it, too.) A secured auto loan would be of one character, an unsecu red credit

- card debt another, a judgment debt a third , and a sub ordinated debenture ( an instrument junior by contract ) a fourth . Keeping these kinds of obligation distinct reduces the potential for confusion about their nature and relative priority. But the number of transactions between a debtor and a single merchant does not affect the genesis, nature , or priority of the d ebt and so does not concern its character. The statute names “character, amount, or legal status” as distinct agributes, and it would undercut this disjunction to treat arithmetic as concerning the debt’s “character” rather than its “amount.”
The district court’s opinion, and the parties’ briefs, devote considerable agention to whether the Bureau made aproper report of “tradelines.” This is a word that Equifax uses in the conduct of its own business. It does not appear in the statute or any relevant regu lation. (The word “tradeline” or the phrase “trade line” appears four times in the Code of Federal Regulations. None of the regulati ons defines it, and

none concerns debt collectors’ reports to credit bureaus.)No. 17

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Whether Equifax has a grievance against Medic al Business Bureau

— and whether Equifax offers debtors some remedy if creditors or debt collectors err in implementing Equifax’s policies

— are neither here nor there for our purposes. Equifax might have a duty to correct its report if an error with respect t o the number of tradelines affects a consumer’s credit rating. See 15 U.S.C. § 1681i(a). But this suit rests on §1692e(2)(A) , not on Equifax’s vocabulary.
Medical Business Bureau did not misstate the “character” of Rhone’s debt to the Illinois Bone and Join t Institute, so the judgment of the district court is

REVERSED

.