Invoking the bona fide error defense is not a get-out-of-jail-free card for a debt collector. The defense only works if the policies and procedures it is meant to protect are reasonable. The Tenth Circuit Court of Appeals has affirmed a lower court’s ruling in favor of a plaintiff who accused a collector of violating the Fair Debt Collection Practices Act by making a collection calling the day after it received a cease-and-desist letter, ruling that the three-day window the collector gave itself to process such requests to be unreasonable.
A copy of the ruling in the case of Lupia v. Medicredit can be accessed by clicking here.
The plaintiff incurred a medical debt that was placed with the defendant for collection. On April 25, 2018, the defendant sent a letter to the plaintiff seeking payment of the debt. On April 30, the defendant placed a phone call to the plaintiff and left a voicemail message. The plaintiff sent a letter to the defendant on May 1 disputing the debt and demanding that defendant stop calling her and informing the defendant that all future correspondence should be in writing. The letter was received by the defendant on May 7, but was not inputted into its system until May 10. Meanwhile, on May 8, the defendant placed another call to the plaintiff and left another voicemail when the call was not answered.
The plaintiff filed suit, alleging the defendant violated Section 1692g(b) and Section 1692c(c) of the FDCPA. A District Court judge partially granted the plaintiff’s motion for summary judgment, which was appealed to the Tenth Circuit.
In affirming the ruling from the lower Court, the panel of Tenth Circuit judges first sought to determine whether the plaintiff had standing to sue. Looking at precedent, including the Supreme Court’s ruling in TransUnion v. Ramirez and the spate of rulings from the Seventh Circuit on standing in FDCPA cases, the panel deemed that the phone call that was placed after the cease-and-desist letter was received was enough to confer standing for the plaintiff to sue. “Though a single phone call may not intrude to the degree required at common law, that phone call poses the same kind of harm recognized at common law — an unwanted intrusion into a plaintiff’s peace and quiet,” the Tenth Circuit ruled.
The Appeals Court then turned to the defendant’s use of the BFE defense.
“Here, Medicredit’s general evidence about its policies — which amount to little
more than retrieving and reviewing the mail — isn’t enough,” the Appeals Court ruled. “And Medicredit’s blanket assertion that its policies were reasonably adapted cannot suffice. We agree with the district court: ‘no reasonable jury could find a procedure which inexplicably allows a three-day lag between receipt of a debtor’s dispute and logging that dispute into the
system … to be reasonably adapted to prevent unauthorized contact with the debtor.’ So Medicredit can’t find refuge under the bona fide error defense because we can find nothing in the record to show that its policies were designed to avoid making unauthorized calls to Ms. Lupia, or others like her.”
