Written Procedures A Major Factor in Ruling Against Collector in FDCPA Bona Fide Error Case

Last week the U.S. Court of Appeals for the 7th Circuit affirmed a District Court ruling against Nationwide Credit Corporation (Nationwide) in an FDCPA case involving the “bona fide error” defense.

According to the Decision,

Nationwide telephoned Leeb about an unpaid medical bill. Leeb disputed the debt, saying that his insurance company should have paid. Because Leeb disputed his debt, the Fair Debt Collection Practices Act required Nationwide to “cease collection” until it verified the debt. But, without verifying the debt, Nationwide sent Leeb a letter that: (1) showed a “balance” of $327; (2) instructed Leeb to “detach the upper portion and return with payment”; (3) asked Leeb to provide additional information; and (4) stated that the letter was “from a debt collector attempting to collect a debt and any information obtained will be used for that purpose.” Leeb sued Nation-wide under the FDCPA.

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