The Consumer Financial Protection Bureau has weighed in on a Fair Debt Collection Practices Act case currently before the Court of Appeals for the First Circuit, filing an amicus brief that takes the position that collectors can and should be held liable under the FDCPA when they make a false statement, even if they claim the did not know the statement was false.
The Background: The plaintiff received a collection letter from the defendant, attempting to collect a debt that had been included in a bankruptcy filing by the plaintiff. The defendant claimed it was never notified that the plaintiff had filed for bankruptcy protection and a judge ruled that the original creditor was responsible for notifying the defendant about the filing.
- “There cannot be liability by Defendant who did not know of the bankruptcy proceeding, a fact which has been made clear by the filings in the bankruptcy court,” the judge wrote.
- The judge also refused a motion to amend the judgment, even though six courts of appeal have held that a violation of Section 1692e of the FDCPA does not have to be intentional or willful to have occurred.
The Brief: The Court overstepped its authority in concluding that debt collectors should not be held liable when they did not know their statements were false, the CFPB argued in its brief. That is a decision for Congress, not a judge.
- A plain text reading of Section 1692e prohibits all false, deceptive, or misleading representations, not just ones that the collector makes intentionally, the CFPB wrote.
- Diving deeper into that section of the FDCPA, Section 1692e(8) prohibits collectors from communicating information which is known or which should be known to be false, the CFPB points out. So if Congress included a willful requirement in only one of 16 examples of false, deceptive, or mislead representations “strongly evinces an intent not to adopt a scienter requirement elsewhere in Section 1692e where Congress did not specifically include one,” according to the CFPB.
