In a case that was defended by Dale Golden and the team at Martin Golden Lyons Watts Morgan, a District Court judge in Alabama has granted a defendant’s motion for summary judgment that it did not violate the Fair Credit Reporting Act in how it conducted investigations of the plaintiff’s disputes, but denied the defendant’s motion that it violated the Fair Debt Collection Practices Act over how it dealt with accounts where identity theft was alleged.
The Background: Back in 2020, someone under the name of Amy Walker signed up for DirecTV on AT&T’s website. The applicant provided the plaintiff’s first and last name, Social Security number, and date of birth. The services was for an address in Newville, Ala. An email was sent to the address used to open the account and the account was verified. The service was then installed at that address. Statements were sent to that address and a credit card was used to make three payments, two of which were later reversed. The plaintiff has never resided at the Newville address.
- The account was placed with a collection agency. Upon referral, AT&T represents that it only places accounts that are “validly due and owing” for collection.
- Before initiating collection activity, the collection agency checked the information it was provided and determined the Social Security number belonged to an Amy Walker who lived in Ozark, Ala. This is the plaintiff.
- The agency sent a collection letter to the plaintiff and made a phone call to her. The person who answered the phone said the agency had the wrong Amy Walker and that she was not associated with the Ozark address.
- A few days later, the plaintiff called the agency and claimed someone fraudulently used her information to open the DirecTV account. The plaintiff was directed to an AT&T website to fill out and submit information to make a fraud claim.
- AT&T concluded the plaintiff failed to substantiate her claim of identity theft because the plaintiff did not submit all the required documents. It then notified the agency that the balance was sustained.
- The agency began reporting the debt to the credit bureaus. The plaintiff twice disputed the debt, but never indicated on the dispute that it was related to identity theft. She said the debt was “not mine” and “other.”
- The plaintiff filed suit, alleging the defendants violated the FCRA and the FDCPA.
The Ruling: The collection agency can not be held liable for violating the FCRA because AT&T was in the best position to determine whether the account was fraudulent and it affirmed the validity of the debt, ruled Judge R. Austin Huffaker, Jr., of the District Court for the Middle District of Alabama.
- “Plaintiff’s assertion of fraud is a legal defense to the enforceability and validity of the AT&T debt rather than a factual inaccuracy in ICS’s reporting,” Judge Huffaker wrote. “The facts of the case here show that ICS reported the account as disputed. Because Plaintiff is really attempting to attack collaterally the information which underlies the credit report, she has failed to provide sufficient evidence showing that a reasonable investigation would have revealed that ICS was inaccurately reporting the account.”
- On the grounds the agency violated the FDCPA, though, it did not show how its procedures were tailored to prevent collection on accounts associated with identity theft prior to sending an initial collection notice, the judge determined.
- “Whether ICS had procedures reasonably adapted to prevent readily discoverable errors on the AT&T account is a close call,” the judge wrote. “At this point, there are simply insufficient facts to support a finding, as a matter of law, that ICS has a pre-collection procedure that is reasonably adapted to discover accounts opened as a result of identity theft.”
