Seventh Circuit Rules in Favor of Debt Collector

If you believe you may have a valid claim under the Fair Debt Collection Practices Act (FDCPA) or the Fair Credit Reporting Act (FCRA) in Oak Park, you should pay attention to a recent ruling out of the United States Court of Appeals for the Seventh Circuit. The Court recently ruled in favor of a debt collector, thereby affirming the lower court’s holding, in a case involving debt collection verification and proper investigation of the debt. The case, Walton v. EOS CCA, sets a binding precedent for courts in Illinois, and it could end up being persuasive in other parts of the country. We want to tell you more about the case and its potential implications.
Procedural History and Facts of Walton v. EOS CCA
In Walton v. EOS CCA, the debtor argued that EOS, the debt collection company, violated the FDCPA and the FCRA in two separate ways. First, the debtor contended that EOS violated the FDCPA when it failed to directly contact the creditor in order to obtain verification of the debt before continuing to make debt collection efforts. Second, the debtor argued that EOS violated the FCRA when it failed to investigate information that the debtor disputed concerning the alleged debt owed. The district court found that EOS upheld its duties under both the FDCPA and FCRA, and as a result found in favor of the debt collector.
How did the claim begin? The debtor received a letter indicating that she owed $268.47 on a closed account. The letter informed her that any failure to pay the amount owed “may cause your account to be referred to an outside collection agency.” The debtor did not pay the bill. Shortly thereafter, the debt was transferred to EOS, a debt collection company. The debt collector contacted the debtor to seek payment on the $268.47 balance. In transferring the debt from the creditor to the debt collector, the creditor made a mistake and included the wrong account number. As a result, the letter from the debt collector cited the correct amount of the debt owed but included the wrong account number (an account number that did not belong to the debtor).
The debtor disputed the debt, citing the incorrect account number on the notice from EOS. The debtor’s name, mailing address, and social security number were all correct on the notice, however. The debtor filed a claim against EOS for the FDCPA and FCRA violations listed above. After the district court found in favor of EOS, the debtor appealed.
What Does it Mean to Obtain Verification of a Debt?
In considering the case on appeal. The United States Court of Appeals for the Seventh Circuit emphasized that the FDCPA does not clarify what it means to “obtain verification of the debt,” and noted that “‘verification’ is ‘the authentication of truth or accuracy by such means as facts, statements, citations, measurements, or attendant circumstances.’” The Court noted that, in considering the debt collector’s duty to obtain verification of a debt, it has a duty to verify the “accuracy of the underlying debt.”
EOS argued that it did verify the accuracy of the underlying debt, and that the incorrect account number—when combined with correct information about the debtor’s identity—should not have required EOS to take additional verification steps. The Court agreed, highlighting that the FDCPA requires “nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed.” EOS, the Court emphasized, “plainly satisfied” this requirement.
The Court also concluded that EOS did conduct a reasonable investigation of the debt, as required under the FCRA, by verifying the debtor’s name, address, and social security number.
Learn More from an Oak Park Consumer Protection Lawyer
The key takeaway from this case is that if underlying information about a debt is accurate and personal information about the debtor is accurate, it is unlikely that a clerical error could result in a debt collection company being required to take additional verification steps or to conduct an additional investigation. If you have questions, an Oak Park consumer protection lawyer can help. Contact the Emerson Law Firm for more information.
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