Part II: Federal appeals court weighs abusive debt collection case revival

As regular readers of our Minnesota Consumer Rights Blog will undoubtedly recall, we recently published a post on a lawsuit that the 9th U.S. Circuit Court of Appeals is considering. The court will decide if a lawsuit should be revived that question of whether a debt collector can be held liable under the Fair Debt Collection Practices Act (FDCPA) for trying to collect a debt that was based on a factual error.

Another dismissal

Picking up where the previous post left off, the case went to trial, but before attorneys could make their closing arguments, the District Court judge again dismissed it. He said that no reasonable juror would hold the debt collector liable because of its “bona fide error” defense.

On appeal, the couple argued that the judge had ignored trial evidence, including testimony from a debt collector employee who said the company had no procedures to avoid mistakes like the one in the case. They asked the court to order a new trial, while the collection agency countered that it had relied on the hospital’s erroneous representations and that it could not create procedures that would prevent such mistakes.

Arguing on behalf of consumers

In an amicus brief, consumer groups argued that the judge’s dismissal should be reversed so that the FDCPA can be applied, while the debt collection industry argued that reversal could turn “the FDCPA into a rule requiring each debt collector to also be auditor, accountant, and fact-checker.”

It should be noted that you can take legal action to stop abusive debt collection. Please contact the Consumer Justice Center for more information.