A District Court judge in California has denied a defendant’s motion for summary judgment in a Fair Debt Collection Practices Act case, even though the plaintiff filed this lawsuit two years after receiving a letter from the defendant attempting to collect a debt that had already been paid, ruling that reporting the inaccurate account information to the credit reporting agencies constituted “discrete” violations of the statute.
The background: The case stems from an apartment lease where the plaintiff was charged $138.07 in unpaid water and sewer fees. Although she paid the amount in January 2021, the defendant later attempted to collect the debt.
- In May 2021, the plaintiff received a collection letter from the defendant that was mistakenly sent to her sister. More significantly, from July 2021 through May 2023, the defendant reported the account as unpaid to all three major credit reporting agencies.
- The plaintiff claimed that this false reporting damaged her credit reputation and caused emotional and physical distress, including stress and migraines, as well as financial costs such as doctor visits and medication.
The ruling: The defendant argued the claims were barred by the FDCPA’s one-year statute of limitations, since the collection letter was sent in May 2021 and the suit was filed in 2023.
- Judge Maame Ewusi-Mensah Frimpong disagreed, holding that each time the inaccurate debt was reported to the credit bureaus, it constituted a “discrete” violation of the FDCPA. This interpretation means that while claims tied to the 2021 letter are time-barred, the plaintiff’s claims based on credit reporting actions on or after August 16, 2022, survive.
- The court also rejected the defendant’s arguments that the charges did not qualify as “consumer debt” under the FDCPA, ruling that utility charges stemming from a residential lease fall within the law’s definition.
- Further, Judge Frimpong found factual disputes as to whether the defendant knew or should have known about the disputed status of the account, preventing summary judgment on both FDCPA and CCRAA claims.
- The defendant also attempted to claim it was covered by the FDCPA’s bona fide error defense, but Judge Frimpong ruled the defendant did not offer enough evidence to prove it had reasonable policies and procedures to prevent violations like those alleged by the plaintiff.
