InfoBytes Blog
7th Circuit affirms ruling in one case, overturns ruling in bona fide error case
On February 2, the U.S. Court of Appeals for the Seventh Circuit, in a consolidated case, affirmed summary judgment for one defendant’s FDCPA bona fide error defense and overturned summary judgment on the same defense for another. According to the opinion, the plaintiffs in each case disputed debts that appeared on their credit reports by notifying the defendants via fax. In the first case, an employee sent the fax dispute to the wrong department, and thus the dispute was never recorded on the account. In the second case, the defendant stopped monitoring the fax machine but had not disconnected it, and therefore did not even realize it received the dispute. The plaintiffs filed separate lawsuits, and the district courts in each case granted summary judgment for the defendants on the grounds that each was entitled to the FDCPA’s bona fide error defense.
The 7th Circuit consolidated the cases on appeal. The appellate court affirmed the first case, holding that the defendant’s procedures were “reasonably adapted” to avoid errors when receiving faxes because there were step-by-step instructions on which department to send faxes to. The court determined that the employee sent the fax to the wrong department by mistake. The plaintiff argued that the defendant nevertheless needed to have a policy in place for what to do when a fax ended up in the wrong department, but the 7th Circuit agreed with the district court that “[t]he absence of such a policy, however, does not mean that the defendant failed to maintain reasonably adapted procedures.” By contrast, the court found the procedures in the second case were not reasonably adapted and did not qualify for the bona fide error defense. While the defendant did remove its fax number from its website, it did not remove the number from the National Registry and did not announce that it would completely stop checking the machine, leaving it no way to prevent the relevant errors.