Judge Grants MSJ For Defense Under BFE in FDCPA Dispute Case

What do you do when you receive a letter disputing a debt, but when you check your records, you have more than 600 individuals with the same name in your system? Sometimes, you don’t mark the right accounts with the dispute notification. But, if you have the proper policies and procedures in place, you can use the Fair Debt Collection Practices Act’s bona fide error defense, and that’s just how one defendant was able to obtain a summary judgment ruling in a lawsuit that was filed against it in Wisconsin.

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

The defendant received a dispute notification from the plaintiff’s attorney. The notification included the Social Security number for the plaintiff as well as an address that the plaintiff shared with his fiancee. When the defendant received the dispute notification, and an employee attempted to mark the account as disputed, the employee found more than 600 accounts in the defendant’s system that had the same name as the plaintiff — Charles Anderson. The original creditor did not provide the defendant with the Social Security numbers of the individuals when the accounts were placed, and the address that was provided to the defendant for this particular individual was different than the one included in the dispute notification. So this particular debt was not marked as disputed by the defendant.

The plaintiff filed suit, alleging the defendant violated several sections of the FDCPA, including Section 1692e(8).

After first determining that the plaintiff has standing to sue, Judge James Peterson of the District Court for the Western District of Wisconsin turned to the defendant’s argument that it should be entitled to the bona fide error defense.

The plaintiff attempted to argue that because his account was accessed while the defendant was trying to identify which Charles Anderson was disputing a debt and because the defendant did not respond to the letter with a request for additional information that the defendant should not be entitled to the bona fide error defense.

But, as Judge Peterson noted, the FDCPA requires collectors to take reasonable precaution to avoid errors, not every conceivable precaution. Plaintiff’s “counsel could easily have prevented the problem in several ways: by including more identifying information in his letter disputing the debt, such as Anderson’s previous addresses; by specifically identifying the debt that Anderson disputed; by sending separate letters for Anderson and Hamblin; or by stating clearly in the letter that both Anderson and Hamblin had debts that they disputed,” Judge Peterson wrote. “The FDCPA does not require I.C. System to anticipate every potential omission or ambiguity in a debt dispute letter.”

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