Be Careful What You Rely On: Washington Court Says Debt Collector’s Reasonable Reliance On Balance Amount From Creditor Not Enough To Avoid FDCPA Violation

In Creager v. Columbia Debt Recovery, a district court judge partially granted plaintiff’s motion for summary judgment, concluding that the debt collector’s attempts to collect an unpaid apartment debt with a balance inflated because the plaintiff had forfeited her security deposit, violated the FDCPA. The information supplied by creditor/client did not protect the debt collector.

The case started after plaintiff signed a one-year lease for an apartment but moved out after six months. After moving out, the creditor assigned the account to defendant, seeking to recover the outstanding 6 months of rent. The final billing statement from the landlord stated that the security deposit paid by plaintiff when she signed her lease had been forfeited because the tenant had terminated the lease early. 

Defendant made several attempts over a period of two years to collect on the debt, during which time plaintiff disputed the forfeiture of the security deposit. After one phone call between plaintiff and defendant, defendant contacted the creditor, and was advised that the security deposit had been properly forfeited. Plaintiff filed suit in Washington, alleging that the balance defendant was attempting to collect was inflated by $1,250 - the amount of the forfeited deposit – in violation of the FDCPA and Washington’s Consumer Protection Act.