Judge Grants MSJ For Defendant in FDCPA Dispute Case

A District Court judge in Indiana has granted a defendant’s motion for summary judgment, ruling that the collection agency was entitled to the Fair Debt Collection Practices Act’s bona fide error defense because a fax that was sent by the plaintiff’s attorney disputing a debt was forwarded to the wrong department.

A copy of the ruling in the case of Ewing v. Med-1 Solutions can be accessed by clicking here.

The plaintiff received a collection letter from the defendant. The plaintiff’s attorney faxed in a dispute letter to the defendant. The receptionist for the defendant accidentally forwarded the fax to the agency’s client care department instead of its legal department. When the debt was not marked as disputed on the plaintiff’s credit report, she filed suit, alleging the defendant violated Section 1692e(8) of the FDCPA by reporting a debt the defendant knew to be disputed.

The defendant argued that the forwarding of the fax to the wrong department was an inadvertent mistake and any violation of the FDCPA was subject to the statute’s bona fide error defense.

To show that the error was not intentional, the defendant noted that the receptionist received six faxes from the attorney in question during a three-day span and forwarded five of them to the proper department. The only one that was not properly forwarded was the one sent on behalf of the plaintiff.

Judge James Sweeney II of the District Court for the Southern District of Indiana, Indianapolis Division, also ruled that the error satisfied the second prong of the BFE defense in that it was the result of a bona fide error. The receptionist knew the sender of the fax was an attorney and correctly forwarded five of six faxes to the proper department. In fact, the receptionist did not know she forwarded the plaintiff’s fax to the wrong department until this lawsuit was filed.

In confirming that the defendant also satisfied the third and final prong of the BFE defense — that it maintained reasonably adapted procedures — Judge Sweeney reviewed the defendant’s policies and procedures for documenting disputes as well as the policies and procedures for handling faxes.

“Indeed, Med-1’s procedures indicate a step by step process for receiving a dispute letter by fax and forwarding that dispute letter to the legal department,” Judge Sweeney wrote. “Moreover, its procedures outline the process for documenting, once a dispute letter has been forwarded to Med-1’s Legal Department, that a debt has been disputed.”

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