The Second Circuit Court of Appeals has overturned a summary judgment ruling in favor of a defendant that was sued for violating the Fair Debt Collection Practices Act because it allegedly sent numerous debt collection notices and subpoenas to the wrong individual, determining that the collector should not have been entitled to invoke the bona fide error defense.
A copy of the ruling in the case of Wagner v. Chiari & Ilecki, LLP, can be accessed by clicking here.
The background in this case is long and can be read in full by reviewing the Second Circuit’s ruling. To summarize: an individual — William J. Wagner, Jr. — stopped paying rent on an apartment and the defendant was charged with collecting the unpaid debt. Over the course of 10 years, the defendant tried to track down the individual at different addresses, with no such luck. The defendant then identified an individual with almost the exact same name — William J. Wagner — and thought it had its man. But the two Wagners were different, and even though the latter Wagner kept telling the defendant he was not the man they were looking for — the last two numbers of their Social Security numbers were different, for example — the defendant sent numerous documents, including information subpoenas and restraining notices, to the latter Wagner’s address.
He filed suit, alleging the plaintiff violated Sections 1692e and 1692f of the FDCPA, but a District Court judge granted the defendant’s motion for summary judgment, ruling it did not use “unfair or unconscionable” means to try and collect on the debt. The judge did conclude that the defendant had violated three provisions of the FDCPA, but ruled it was entitled to the FDCPA’s bona fide error defense.
In overturning the ruling, the Second Circuit said that because the defendant did not maintain procedures reasonably adapted to avoid its error, it was not entitled to the BFE defense. The defendant conceded “it had no written policies for situations in which employees of C&I believe that a debtor may live at a particular residence, but are not certain; C&I has information about the location of a person with a name similar to a debtor’s; or a non-debtor with a name similar to a debtor informs C&I that they are not the debtor C&I sought to contact.”
