Judge Partially Grants MSJ for Plaintiff in FDCPA Case Over Collecting Incorrect Amount

A District Court judge in Washington has partially granted a plaintiff’s motion for summary judgment, ruling that the defendant’s attempts to collect an unpaid apartment debt that was inflated because the creditor determined that the plaintiff had forfeited her security deposit violated certain provisions of the Fair Debt Collection Practices Act.

A copy of the ruling in the case of Creager v. Columbia Debt Recovery can be accessed by clicking here.

The plaintiff signed a one-year lease for an apartment building, but moved out after six months. After she moved out, the creditor assigned the account to the defendant seeking to recover the remaining balance, but the final statement indicated that the security deposit made by the plaintiff when she signed her lease had been forfeited because she terminated the lease early.

The defendant made several attempts during the course of two years to collect on the debt, and the plaintiff disputed the forfeiture of the security deposit. After one phone call between the plaintiff and a representative of the defendant, the defendant consulted with the creditor, which advised that the security deposit had been properly forfeited.

The plaintiff filed suit, alleging that the balance the defendant was attempting to collect was inflated by $1,250 — the amount of the forfeited deposit. She alleged the defendant violated Sections 1692e, 1692e(2), 1692e(8), and 1692f(1) of the FDCPA, as well as sections of Washington’s Consumer Protection Act.

Judge Barbara Jacobs Rothstein of the District Court for the Western District of Washington, granted summary judgment in favor of the plaintiff on the 1692e, 1692e(2), and 1692f(1) claims, ruling that the strict liability provisions of the FDCPA made the defendant liable for collecting the incorrect balance even though the defendant had a “reasonable belief” that the amount it was trying to collect was accurate. Judge Rothstein had previously partially denied a motion to dismiss that was filed by the defendant.

The defendant attempted to use the FDCPA’s bona fide error defense, but Judge Rothstein ruled that the alleged error made by the defendant was not related to an interpretation or application of the FDCPA. “Even if Defendant’s error were bona fide, Defendant fails to satisfy its burden of demonstrating that it had ‘maintained procedures reasonably adapted to avoid the violation,’ ” Judge Rothstein wrote. “Defendant has not met its burden of proving that it affirmatively maintained procedures designed to avoid the type of error at issue in this case.”

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