Defamation typically involves blatantly false statements portraying someone as criminal or morally corrupt. Yet I often encounter prospective plaintiffs who want to sue over statements that do not so clearly impugn the person’s character. Remember that not all false statements will qualify as defamatory in nature; a sufficient level of defamatory sting is required. Take, for example, a false statement claiming that someone owes money on a debt. Whether a statement like this can support a defamation action will depend on exactly what was said and the context in which the statement was made. Commenting negatively on someone’s indebtedness may constitute defamation under Virginia law if the comments suggest dishonesty or bad faith by the indebted person. Absent such aspersions on the alleged debtor’s character, the statements are unlikely to be sufficient to create a cause of action.
The issue came up this week in the case of Ackerman v. Maximus Education LLC from the Eastern District of Virginia, which wasn’t even a defamation case. The facts (according to the opinion) go something like this: The plaintiff, Ms. Ackerman, had multiple federal student loans serviced by the defendant, Maximus Education. After Ms. Ackerman sought a disability discharge in early 2023, these loans were transferred away from Maximus to another servicer. Despite the transfer, Maximus allegedly continued to report Ms. Ackerman’s loans as carrying outstanding balances, which she claimed was both inaccurate and harmful to her credit profile. Upset that her credit reports still showed around $25,000 of student loan debt owed to Maximus, Ms. Ackerman filed disputes with credit reporting agencies and ultimately sued Maximus under the Fair Credit Reporting Act.