The Northern District of Illinois recently held that, under the facts of this particular case, the “bona fide error” defense is a question of fact for a jury to decide and could not be decided on summary judgment.
Ferris v. Convergent Outsourcing Inc. involves a Fair Debt Collection Practices Act class action alleging that Convergent, an agency that collects on debts on behalf of Transworld, sent a letter with the incorrect current creditor listed. Convergent asserted bona fide error, claiming that the incorrect information on the letter was due to inadvertent changes made to the letter template.
The facts of the case show that Transworld contracted with Convergent to collect on accounts referred to it. Upon receipt of an account from Transworld, Convergent would upload information regarding the loan and consumer contact information into a Flexible Automated Collection System (“FACS”). On January 19, 2016, a manager at Convergent requested changes to FACS, which resulted in the consumer’s original creditor information being populated in the area for the current creditor. Over the next several weeks, Convergent caused 6,011 notices to be sent to 4,034 consumers that incorrectly listed the original creditor in the place of the current creditor. Ferris received one of these letters on February 12, 2016.
Both parties filed motions for summary judgment. The Court granted Convergent’s motion as to the issue of Transworld not being a debt collector, and denied it as to the issue of the bona fide error as the Court found that it must be decided by a jury. Ferris’ motion was also granted in part as to two specific violations of the FDCPA, but otherwise denied.
The Court found that Transworld was not a debt collector under the FDCPA, as the record did not indicate if the debts were delinquent at the time Transworld obtained them. On the bona fide error defense, the Court stated that Convergent needed to satisfy three elements to assert a bona fide error defense: (1) that the FDCPA violation was not intentional; (2) that the FDCPA violation resulted from a bona fide error; and (3) that Convergent maintained procedures reasonably adapted to avoid any such error.
The Court found that Convergent’s manager made the changes to FACS because he believed it would make their telephone operations easier, not because he hoped it would confuse consumers. As there was no evidence that anyone knew that the change would result in the letter vendor using an incorrect creditor name, and this possibility simply did not occur to the manager or the software developers, the error was not deemed intentional. As to the third element, the Court looked into two procedures Convergent may have used to avoid such errors – namely, an improved review process for programming changes or testing of the effects of program changes on the form letters. Noting that the FDCPA only requires reasonable precaution – and not perfect foresight – the Court held that on these facts the reasonableness of any procedures used by Convergent is a matter for a jury to decide.