A District Court in the Seventh Circuit has held that a debt collector may not avail itself of the § 1692k(c) bona fide error defense if it “intentionally chose to present conflicting information,” even if that conflicting information was provided to it by the creditor.
In Garcia v. Miramed Revenue Group, LLC, 2018 U.S. Dist. LEXIS 17818 (N.D. Ill. Jan. 30, 2018), the debtor, Garcia, defaulted on a debt to Community First Medical Center (“Community First”). Community First placed the account with Miramed Revenue Group (“Miramed”), and Miramed sent a collection letter to Garcia. The letter stated that the “amount due” was $100.00 in three different places, but also contained the following information: Following is an accounting of the patient portion now due from you:
Total Charges: $3665.00
Insurance Payments: $-1759.18
Adjustments $0.00
Patient Payments: $0.00
Remaining Patient Balance: $100.00
Garcia filed suit, alleging the letter violated the FDCPA because it communicated varying amounts owed by Garcia; the stated $100.00, and the difference between the total charges and the stated insurance payments, $1,905.82. The District Court agreed and, in granting her motion for summary judgment, held that “a reasonable consumer would not be certain whether the consumer owed $100.00 or $1,905.82.”
Miramed contended that even if the letter was misleading, it was entitled to the bona fide error defense, 15 U.S.C. § 1692k(c), because it was permitted to rely upon information sent to it by the owner of the debt – here, Community First. Miramed pointed out that it had a contract with Community First requiring them to send accurate information for each account. Unpersuaded, the District Court found that “whether or not [Community First] gave information concerning payments made, is irrelevant.” While Miramed “may not have intentionally and willfully violated the FDCPA,” it “intentionally chose to present the conflicting information concerning the amount of the debt believing it to be compliant with the law.”
Implications of Garcia
The Garcia court’s holding that information relayed to a debt collector by a creditor is irrelevant to the determination of whether the collector can rely on a bona fide error defense is novel. Even if a collection letter clearly and repeatedly states the amount owed, debt collectors should take care to ensure that no other information in the letter could be read as suggesting a different amount is owed.
