Judge Denies MTD in FDCPA Case Over Judgment Letter Sent to Wrong Address

A District Court judge in Ohio has denied a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act by accidentally attaching a judgment to the house of the plaintiff’s parents instead of the plaintiff. More details here

This case is not as clear-cut as it appears from the result of this motion’s summary. In this case, the plaintiff is not the debtor, rather the debtor’s mother who happened to have the same name (with the exception of a middle name) and lived at the same residential address. The plaintiff, the mom, is claiming a cause of action under the FDCPA due to the confusion set forth by a letter sent to the debtor, the daughter to the shared home of the mother and daughter. The letter addressed to the daughter, but without the middle initial, also to the plaintiff, her mother was sent to notify the daughter of a judgment lien on all of the daughter’s real property. As the plaintiff read the letter that was addressed to her at her address, she claims that she thought the letter referred to a lien on her and her house, her own real property, not her daughters since without the middle initial there is no way of discerning the two by name.

The court was asked to determine if the case should be dismissed or if there is a possibility that the defendant violated one of the prohibitions set forth in §1692e (see footnote 1) by not clearing distinguishing the lien to be the daughter’s and not for the plaintiff. The court decided to deny the motion to dismiss and pointed to the fact that it is reasonable to see where a party could be confused if he or she was not familiar with the legal process of foreclosure or judicial process. The court could not speak to its opinion on the call and conversations that occurred after the receipt of the letter, as this would require additional evidence not reviewed for this motion. The court mentions that the defendant claims notes are retained from the call, but there is no mention of a recording.

Therefore, if the notes provided by the defendant cannot contradict the claims that the plaintiff made as it relates to the response she was met with when she called the defendant to inquire about the letter, or if the failure to correctly identify the debtor with her middle name is found to be enough to create an action under the FDCPA, the question is then, was the violation unintentional and inadvertent and simply a result of a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such an error (see footnote 2). Or should have procedures been put in place to avoid this type of mistake.

The take away for all debt collectors from this case is that procedures and policies should be in place to avoid even the most unlikely of scenarios to avoid costly litigation to find out if such should be in place.

1 Bauman v. Bank of Am., N.A., 808 F.3d 1097, 1100 (6th Cir. 2015); 15 U.S.C §1692a. To prevail on a FDCPA claim, a plaintiff must establish that: (1) he or she is a “consumer,” (2) the “debt” arose out of a transaction which was “primarily for personal, family or household purposes,” (3) the defendant is a “debt collector” and (4) defendant violated one of the prohibitions set forth in § 1692

2 15 U.S. C. 1692k(c)

By Laurie Nelson, General Counsel & Chief Compliance Officer

Originally Published in ARM Compliance Digest – December 9