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Judge Denies Dual MSJ Requests in Case Over Failure to Mark Account as Disputed

A District Court judge in Michigan has denied requests for summary judgment from both the plaintiff and the defendant in a case in which the defendant is accused of violating the Fair Debt Collection Practices Act by allegedly failing to mark an account as disputed, and the judge says it is up to a jury to decide whether the defendant made a bona fide error.

A copy of the ruling in the case of Ewers v. Rainmaker Recovery 3, Inc., can be accessed by clicking here.

The plaintiff received a collection letter and a phone call from the defendant attempting to collect on a medical debt. The letter was sent to the plaintiff on Aug. 14. 2017. On Sept. 13, 2017, the plaintiff sent a letter back to the defendant disputing the debt and seeking verification. In December, the plaintiff checked his credit report and noted that the account had not been marked as disputed. The defendant sent the verification to the plaintiff in January 2018.

The defendant is a small collection agency with only three employees. The assistant collections manager, who was also a collector, testified that he may have failed to check a box in the company’s collection software to note that the account was disputed. When he audited the account on Dec. 30, 2017, he noted the error and corrected it. The collector was unable to determine whether the oversight was a result of human error or a problem with the collection software.

Because it is not yet possible to understand how the account was not marked as disputed, Judge R. Steven Whalen of the District Court for the Eastern District of Michigan, Southern Division said that the defendant can not yet use the FDCPA’s bona fide error defense.

“We simply do not know how this occurred, or to what extent Rainmaker’s procedures were reasonably designed to prevent errors,” Judge Whalen wrote. “Indeed, in its amended response to Plaintiff’s motion for summary judgment, Rainmaker acknowledges that ‘[a] fact question exists as to whether the upload to Equifax resulted from a software glitch or bona fide error.’ “

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