The U.S. Court Of Appeals for the Eleventh Circuit ruled last week in a case involving Citigroup that the Fair Debt Collection Practices Act (FDCPA) does not apply to creditors, as everyone in the ARM industry already knows.

What’s concerning about the case is the amount of time and money the bank was forced to spend in a case that was appealed up to lofty legal levels. To add insult to injury, the case was brought by the consumer pro se.

The case, Goia v. CitiFinancial Auto Corp., arose from a 2007 automobile purchase that went sideways. Goia did not feel he was responsible for damage insurance payments taken on by Citi – who financed the car purchase – despite the insurance provision in the contract. Citi eventually tried to collect the payments.

Goia claimed that Citi harassed him in the attempts to collect the debt and that it was liable under the FDCPA. Both the lower court and the appellate court rejected that claim, noting that the statute applies only to third party collectors, not creditors collecting on their own behalf.

As a possible explanation for how the suit got all the way to the federal circuit court, Goia threw a lot of accusations at Citi: in addition to the FDCPA claims, he even accused the government of being liable for a civil rights claim because the United States owned shares of Citi stock.

Still, a baseless pro se FDCPA case was allowed to advance all the way to the circuit court level, a troubling development for any ARM company defending such claims.