Reasonable Precautions Meet FDCPA
A debtor filed a lawsuit against a debt collector, alleging violations of the Fair Debt Collection Practices Act (FDCPA) in that the defendant wrongfully attempted to collect a time-barred debt. The defendant won summary judgment. The record showed the plaintiff had made his last payment in August of 2010 and attempted to make another payment in June of 2011, but the payment did not clear. Defendant, whose client purchased plaintiff's delinquent account from original creditor, then sued the plaintiff in February of 2016, but the state court dismissed the claim because the last actual payment in August of 2010 occurred outside of the applicable 5-year limitation period. On appeal the court determined the lower court could properly find a bona fide error defense applied, where the debt collector, (1) made a mere factual mistake by using the wrong date of the debtor’s last payment from data supplied by its client, (2) was unaware the June 2011 payment did not clear, (3) had received an affidavit from the client that data in the report was accurate, and (4) overall took reasonable precautions to prevent attempts to collect time-barred debts.