In Ewing v. Med-1 Solutions, Judge Sweeney II of the District Court for the Southern District of Indiana granted summary judgment for the defendant, regarding the plaintiff’s allegation that the defendant violated the Fair Debt Collection Practices Act by reporting her debt to TransUnion after the plaintiff disputed the debt. In its ruling, the court highlighted that a company that takes reasonable precautions and maintains reasonable procedures to avoid clerical or factual mistakes satisfies the third element in maintaining a bona fide error defense to an alleged FDCPA violation.
In that case, the defendant sent the plaintiff debt collection letters in 2015 regarding medical services, and the plaintiff disputed the debt in 2016. Upon receipt of the plaintiff’s dispute letter, the defendant’s receptionist inadvertently forwarded the letter to the wrong department, and the dispute was not reported. When a 2018 TransUnion credit report indicated that the dispute of the debt had not been reported to the credit reporting agency, the plaintiff filed a lawsuit alleging that the defendant violated the FDCPA by “continuing to report her debt to a credit reporting agency when [the defendant] knew the debt was disputed by her.”
The issues in the case were: (1) whether the defendant could maintain a bona fide error defense to the FDCPA violation; and (2) whether the plaintiff had “sufficient evidence” to maintain an FDCPA claim against the defendant.
The bona fide error defense to the FDCPA “provides a safe harbor, a defense that bars liability.” Specifically, “[a] debt collector is not liable in any action brought under the FDCPA . . . if it ‘shows by a preponderance of evidence that  the violation was not intentional and  resulted from a bona fide error  notwithstanding the maintenance of procedure reasonably adapted to avoid any such error.’”
Here, the court held that the defendant was entitled to rely on the bona fide error defense.
First, the court held that the defendant’s receptionist did not intend to forward the dispute letter to the wrong department. It reasoned that the receptionist understood where she needed to forward the letter as she had previously successfully forwarded five letters from the plaintiff’s attorney to the legal department. This indicated that her forwarding of the sixth letter to the client care department was unintentional.
Second, the court held that the violation resulted from a bona fide error. It reasoned that the defendant’s receptionist “made a genuine mistake,” for reasons stated above, and was unaware of the mistake prior to commencement of litigation.
Third, the court held that the defendant maintained reasonable procedures “adapted to avoid any such error.” The court emphasized that only “reasonable precautions,” not “every conceivable precaution” to avoid the error were required. It reasoned that the defendant’s extensive employee training program (training employees on the FDCPA, how to handle disputed debts, a two-week training program on the Procedure Manual, and rigorous testing requirements), Procedure Manual outlining specific steps employees were required to take in order to avoid reporting disputing debt, and managerial review evidenced reasonable procedures. The court found that the plaintiff’s argument that “[the defendant] ha[d] no policy or procedure for redirecting improperly forwarded communications” mischaracterized the true issue in the case: whether “[the defendant had reasonable procedures in place to avoid incorrectly reporting debts that were disputed.” Accordingly, the court granted summary judgment for the defendant.