[UPDATED] Appeals Court Upholds MSJ For Plaintiff in FDCPA Case

EDITOR’S NOTE: This article was updated to include comments from Jack Brown, the President of Gulf Coast Collection Bureau

The Court of Appeals for the Eleventh Circuit has upheld a summary judgment ruling in favor of a plaintiff who sued a collector for violating the Fair Debt Collection Practices Act because she received a collection letter and phone calls seeking to collect on a debt that was the result of a pending worker’s compensation claim, for which her employer or health insurance carrier should have been responsible for paying.

A copy of the ruling in the case of Kottler v. Gulf Coast Collection Bureau can be accessed by clicking here.

The plaintiff received a collection letter from the defendant, and said she was “clustered and jumbled” why she was being contacted by the defendant and that she feared the collector would “ruin her credit.” She sued the defendant, alleging it violated Section 1692e(2)(A) of the FDCPA by making a false representation about the character, amount, or legal status of a debt because, in Florida, employees are not liable for medical treatment or services when they are injured on the job and healthcare providers may not seek to collect or receive a fee from an injured employee. Instead, the providers must seek recourse from the employer or health insurance carrier.

“Any consumer in Florida unfamiliar with its worker’s compensation laws who received the letter Kottler received would be misled to think that she was obligated to remit payment for medical bills that were owed by her employer,” the Appeals Court wrote.

After first confirming that the plaintiff had standing to pursue her lawsuit, the Appeals Court tackled the defense’s argument that it should be allowed to invoke the FDCPA’s bona fide error defense because it relied on assurances from the healthcare provider that identified potential worker’s compensation cases, but neither the District Court nor the Appeals Court felt that the defendant went far enough to satisfy the third prong of the BFE defense, which requires having policies and procedures in place to avoid such an error. Had the defendant used additional screening procedures to detect if a debt was subject to a worker’s compensation claim, it might have been able to use the BFE defense, the Appeals Court ruled.

The following comments were provided to AccountsRecovery.net by Jack Brown, the president of Gulf Coast Collection Bureau:

“Although the court states that GCCB sent a letter and made phone calls, the Plaintiff did not move forward with the allegation that GCCB made phone calls after reviewing our records that confirmed no outbound calls had been made on the account (rather she was receiving calls in general – a point overlooked by the appeals court). In fact, the consumer called in upon receiving the validation notice and informed the agent that it was subject to work comp within the validation period. The agent advised the consumer that she did not owe the debt and that all follow up would occur through the insurance carrier. The agent wished her well on her recovery and properly updated the account appropriately.

“In regards to the policies and procedures, the Court found that there were policies and procedures in place but felt that the procedures did not go far enough. The policies and procedures included assurances from the provider that the balance was owed by the consumer, included internal scrubs to review if there was any indication regarding work comp on the turn over data. The Court decided that the P&P did were insufficient because we could independently check the State of Florida’s workers compensation database to see if the consumer had a pending case.”

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