Judge Denies BFE Defense Over Differing Balances in Collection Letter

A collection law firm is not entitled to the Fair Debt Collection Practices Act’s bona fide error defense because it did not have the proper procedures in place to keep a programming mistake from happening, a District Court judge in Ohio has ruled in a bench trial, ordering a judgment in favor of the plaintiff.

A copy of the ruling in the case of Garcia v. The Law Offices of Howard Lee Schiff, PC, can be accessed by clicking here.

The judge in the case, Judge Victor Bolden of the District Court for the District of Connecticut, awarded $500 in statutory damages to the plaintiff, who originally filed the lawsuit back in 2016. The judge did also award costs and attorneys fees to be paid to the plaintiff’s attorneys, Yaakov Saks and Raphael Deutsch from Stein Saks PLLC.

Judge Bolden had previously denied a motion for summary judgment filed by the defendant, ruling that “even though the defendant understood the language in a collection letter, a least sophisticated consumer still may have been confused by it.”

The plaintiff received a collection letter that had two different balances on it. One listed a “current balance” of $565.46, and the other listed a “charge-off balance” of $663.94. The discrepancy was enough to confuse or mislead an unsophisticated borrower, Judge Bolden ruled in awarding the judgment to the plaintiff.

The defendant argued that the differing amounts did not rise to the level of a material statement and that it should not be punished “for what amounts to a typographical error.”

During the trial, a representative of the defendant testified to the policies and procedures put in place to try and keep errors of this type from happening. After looking at why the letter contained the two different balances, the defendant’s “analysis suggested a programming error had occurred, and that the field for payments to the client was missing from the form letter.”

Judge Bolden ruled the programmer who created the letter, who had two decades of experience working for the defendant, should have been able to develop a procedure to keep this kind of error from happening.

“Defendant’s testing did not reveal that one of two types of payments was missing from the form letter,” Judge Bolden wrote. “Moreover, Defendant had no procedures for detecting mathematical failures, such as the one in Mr. Garcia’s letter. A simple addition and subtraction program would have revealed that $663.94 minus zero did not equal $565.46. It is not unreasonable to assume that Defendant’s experienced programmer could address and thus avoid these basic mathematical errors. In any event, reasonable testing procedures would have caught the missing payments field.”

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