A District Court judge in Washington has granted a plaintiff’s motion for partial summary judgment on claims that a collection operation violated the Fair Debt Collection Practices Act when it reported a debt that was not owed by the plaintiff on his credit report, denying the defendant’s attempt to use the bona fide error defense because it relied on the information it was provided by the original creditor.
The background: In August 2023, the plaintiff discovered that the defendant had reported a $14,000 debt on his credit report tied to a residential lease. The problem: the debt did not belong to him.
- After calling the defendant and even visiting its office in person with identification, the plaintiff continued to dispute the account.
- The plaintiff had multiple calls with representatives of the defendant to clear up the situation, and also contacted the original creditor, before being informed that the information was being deleted from his credit report.
- The plaintiff filed suit, alleging violations of the FDCPA, Washington’s Consumer Protection Act, and the Washington Collection Agency Act.
The ruling: Judge Thomas S. Zilly of the District Court for the Western District of Washington found that reporting a debt the plaintiff did not owe was a material misrepresentation under the FDCPA because it directly impacted his creditworthiness and caused him to expend significant effort. Judge Zilly noted that “a tradeline reporting that Plaintiff owed a debt is not a trivial misstatement but one that directly affects creditworthiness and could prompt a consumer to pay an invalid debt.”
- The defendant argued that any error was unintentional and resulted from relying on the original creditor’s data, invoking the FDCPA’s bona fide error defense.
- But Judge Zilly rejected the BFE defense, stressing that outsourcing responsibility to a creditor does not qualify as maintaining “procedures reasonably adapted to avoid the violation.”
- Using the BFE defense requires concrete safeguards, not contractual assurances, the judge noted.
