Thank You For Submiting Feedback!
Although the Fair Debt Collection Practices Act (FDCPA) is a strict liability statute, it excepts from liability those debt collectors who satisfy the narrow bona fide error defense. That defense provides that: A debt collector may not be held liable in any action brought under the FDCPA if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. 15 U.S.C.S. § 1692k(c). The bona fide error defense is an affirmative defense, for which the debt collector has the burden of proof. Thus, to qualify for the bona fide error defense, the defendant must prove that (1) it violated the FDCPA unintentionally; (2) the violation resulted from a bona fide error; and (3) it maintained procedures reasonably adapted to avoid the violation.
Defendant debt collection law firm appealed from the United States District Court for the District of Montana, challenging the entry of summary judgment against it under the federal Fair Debt Collection Practices Act (FDCPA), and a subsequent jury verdict awarding damages to plaintiff debtor under the FDCPA, the Montana Unfair Trade Practices and Consumer Protection Act (MCPA), and state torts of malicious prosecution and abuse of process.
Did the district court err in concluding that the firm's bona fide error defense failed as a matter of law?
Affirming, the court concluded that ample evidence existed in the record to support the jury's award. The debtor suffered a head injury in 1990 and suffered from mixed personality disorder and multiple other afflictions, including post-traumatic stress disorder. Trial testimony established that the lawsuit was a significant stress factor in the debtor's life and that the adverse impacts of the firm's lawsuit may have worsened the debtor's existing symptoms of headaches, anxiety, paranoia, and difficulty relating to others. The district court correctly concluded that the firm's bona fide error defense failed as a matter of law. Its error was not its failure to catch the debtor's time-barred collection action. Instead, it erred by relying without verification on a client's representation and by overlooking contrary information in its electronic file. The firm violated the FDCPA when it served requests for admission containing false information upon the pro se debtor without an explanation that the requests would be deemed admitted after thirty days.