A District Court judge in Alabama has partially granted a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case, ruling that an ambiguously worded dispute letter from the plaintiff’s attorneys could have indicated to the defendant that multiple debts were being disputed instead of just one and that the defendant is not entitled to the FDCPA’s bona fide error defense.
The Background: The defendant was attempting to collect on two debts from the plaintiff. For one of the debts the defendant had the plaintiff’s name, address, and Social Security number. For the other, it had the plaintiff’s name and address.
- The plaintiff hired a law firm to represent her and the firm sent the defendant two dispute letters. The letters stated that the firm was representing the plaintiff “for all debts that he or she may have” and that the plaintiff “disputes the debt which you are attempting to collect.” The dispute letters included the plaintiff’s name, Social Security number, and address — which was different from the address the defendant had in its system.
- The defendant investigated the dispute and was able to match one of the accounts — the one with the Social Security number — which it deleted from the plaintiff’s credit report. However, the defendant did not identify the other debt based on the information provided.
- The plaintiff filed suit, accusing the defendant of violating the FDCPA by not marking the second account as disputed when it furnished information to the credit reporting agencies.
The Ruling: While granting summary judgment for the defendant on one of the FDCPA claims, Judge L. Scott Coogler of the District Court for the Northern District of Alabama denied the defendant’s summary judgment on the claims it violated the FDCPA because it did not mark the second account as disputed.
- The dispute letter did mention “debts” at one point, which could have provided enough information that multiple debts were being disputed, the judge ruled. “A reasonable jury could conclude from this ambiguity either that [the plaintiff] disputed ‘all debts’ held by [the defendant] or that she disputed only a single ‘debt,’ ” Judge Coogler wrote. ” “Therefore, a question of material fact exists as to whether [the defendant] knew or should have known the KinderCare account was disputed based on the information in the Dispute Letters.”
- The judge also denied the defendant’s attempt to invoke the bona fide error defense, questioning whether the policies and procedures the defendant followed were comprehensive enough.
