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Judge Grants MSJ For Defendant Using Bona Fide Error Defense in FDCPA Suit

A District Court judge in Alabama has granted summary judgment in favor of a defendant under the Fair Debt Collection Practices Act’s bona fide error defense after it was sued for attempting to collect a debt that had been discharged in a bankruptcy proceeding.

A copy of the ruling in the case of Lawson v. I.C. System, Inc., can be accessed by clicking here.

The plaintiff — while living in Alabama — incurred a debt to Comcast. The plaintiff subsequently filed for bankruptcy protection and the debt was discharged. A year after the debt was discharged, Comcast placed the unpaid debt with the defendant, and provided a Tennessee address to reach the plaintiff. The defendant ran the account through a bankruptcy scrub with a third-party provider using the information provided by Comcast, but the search did not reveal the plaintiff’s bankruptcy filing. The defendant then sent two letters to the Tennessee address, which went unreturned. The defendant then sent letters to the Alabama address and reported the debt as unpaid to the credit bureaus. The plaintiff never responded to the letters, never disputed the debt, but did file a lawsuit against the defendant.

In granting summary judgment in favor of the defendant, Judge Abdul Kallon of the District Court for the Northern District of Alabama, Northwestern Division, ruled that relying on the information provided by the creditor “reasonable” when it performed its bankruptcy scrub and what resulted was a “the quintessential example of an ‘objectively reasonable error’ that was ‘made in good faith’ and constitutes ‘a genuine mistake, as opposed to a contrived mistake.’ “

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