A computer glitch accidentally added an individual’s name to an apartment lease document, which was then assigned to a debt collector for recovery. When the individual disputed the debt, the collector sent an email to the creditor seeking additional information, then deleted the information from the individual’s credit report four months later. That was not enough to satisfy a Magistrate Court judge in Texas who denied the defendant’s motion for summary judgment and summary judgment based on the Fair Debt Collection Practices Act’s Bona Fide Error defense.
A copy of the ruling in the case of Reed v. I.Q. Data International can be accessed by clicking here.
There is a lot of backstory to this case that I won’t go into tremendous detail on here (you can get it by reading the ruling), but the plaintiff was checking her credit report and saw a tradeline for the debt in question. She had applied to live at the apartment building that was the creditor on the account, but never executed a lease or resided in the building. She received a letter from the defendant to collect on the debt, and then called the defendant five times. On one call, she was instructed to fill out a fraud packet; in another call a representative told her not to fill out the fraud packet because the issue was likely an error on the part of the original creditor. The plaintiff disputed the debt and the defendant sent an email to the creditor requesting additional information. The debt was ultimately removed from the plaintiff’s credit report three months after she filed her suit against the defendant.
The defendant is not entitled to the Bona Fide Error defense, ruled Judge Elizabeth S. Chestney of the District Court for the Western District of Texas, because it did not establish that its mistake was unintentional. The defendant argued that the mistake occurred because it relied on information it was provided by the creditor, but “there is no testimony in the record from any representative of I.Q. Data regarding what it received from Icon regarding the debt; when it received it; and whether it had any access to the underlying lease documents at the time it attempted collection of the debt,” Judge Chestney wrote. “Nor did I.Q. Data provide the Court with any affidavits or declarations detailing these facts.”
If, for example, the defendant had a copy of the lease agreement prior to initiating its collection activity, the error may not have been unintentional, Judge Chestney wrote. As well, the fact that it took months to delete the item from the plaintiff’s credit report and that it only sent one email to the creditor for additional information after the plaintiff disputed the debt could “undermine” the defendant’s “credibility regarding the alleged unintentionality of its error and its adherence to any procedures in place to avoid such errors,” Judge Chestney ruled.
