The Court of Appeals for the Seventh Circuit has upheld lower court rulings in four cases against Portfolio Recovery Associates, affirming summary judgments in favor of the plaintiffs.
In each of the cases, PRA was contacted by a non-profit legal aid organization which disputed the debts, saying the amount owed was not accurate. In the letters sent to PRA, a lawyer for the organization indicated he was representing the individual being contacted and included the following section:
This client regrets not being able to pay, however, at this time they are insolvent, as their monthly expenses exceed the amount of income they receive, and the amount reported is not accurate. If their circumstances should change, we will be in touch.
PRA admitted to receiving the letters, but said it considered them only to be attorney representation letters and not letters that were disputing the debts. It reported the debts to the credit bureaus without marking them as disputed. Each of the four plaintiffs sued PRA for violating the Fair Debt Collection Practices Act and each plaintiff was granted a summary judgment. PRA appealed the rulings, and a panel of judges from the Seventh Circuit yesterday affirmed the lower court’s ruling.
A copy of the ruling in the case of Katherine Evans, Lusvina Paz, Peter Bowse, and Evelyn Gomez, each v. Portfolio Recovery Associates, can be accessed by clicking here.
In supporting its claim, a vice president of operations at PRA said that there was nothing in the letters that indicated a “clear” dispute. The vice president also noted that the lawyer did not send the letters to PRA’s disputes department, but instead faxed them to the company’s general counsel. In previous situations, the attorney who sent the faxes had sent letters that clearly indicated the debts in question were being disputed.
PRA raised four arguments in its defense:
- Plaintiffs did not have Article III standing
- The letters did not “dispute” the debt within the meaning of § 1692e(8)
- Even if PRA violated the statute, the violation was not material
- PRA has a bona fide error defense under § 1692k(c)
The Appeals Court didn’t accept any of the defenses in affirming the lower court’s decisions. While noting the placement of the language disputing the debt was “curious,” the Appeals Court nonetheless said the FDCPA does not require that an individual use the word “dispute” when disputing a debt.
