On October 28, the U.S. Court of Appeals for the 9th Circuit affirmed the lower court’s entry of summary judgment in favor of a law firm in a case alleging violations of the FDCPA related to collection efforts on a used car debt. The panel stated that it did not need to decide whether the FDCPA was violated because the bona fide error defense applied, even if a violation occurred.
The court explained that the bona fide error defense protects a debt collector if the violation was unintentional, resulted from a bona fide error, and occurred despite the maintenance of procedures “reasonably adapted to avoid any such error.” The plaintiff argued in the district court that the bona fide error defense did not apply because the third criterion was not satisfied. Thus, the appellate court focused its analysis on whether sufficient procedures were maintained to avoid the error.
The 9th Circuit found that the law firm maintained sufficient procedures to avoid overstating debts: It reviewed the dealer’s accounting ledger, the plaintiff’s signed contract, and ensured each charge matched contract terms. The firm also sought additional verification before filing suit, including sending a letter to the plaintiff describing the debt and inviting a response to identify potential inaccuracies and by obtaining an affidavit from the dealer. The court distinguished this case from prior decisions where the defense was unavailable, noting the firm did not solely rely on the dealer’s representations but also on the plaintiff’s signed authorizations.
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