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Smith v. Transworld Sys., Inc., 953 F.2d 1025 (6th Cir. 1992). Although the debt collector sent from its California headquarters a second letter to the consumer shortly after receiving the consumer’s cease and desist letter at its Columbia, Ohio office, the debt collector demonstrated ‘‘procedures reasonably adapted to avoid any such error’’ and thereby established a bona fide error defense. Dissent argued that the debt collector ‘‘has intentionally structured and implemented a system that defies compliance with the absolute duty mandated by § 1692c(c),’’ so bona fide error defense should have been rejected.
Johnson v. Riddle, 305 F.3d 1107 (10th Cir. 2002). A debt collector seeking the protection of the bona fide error defense carried the burden of proving that the violation was (1) unintentional, (2) a bona fide error, and (3) made despite ‘‘the maintenance of procedures reasonably adapted to avoid’’ the violation. The Tenth Circuit disagreed with the argument that the bona fide error defense could not include a debt collector’s mistake of law and remanded to the district court the bona fide error defense issue of what procedures were employed and whether such procedures were ‘‘reasonably adapted to avoid’’ the legal error.
Picht v. Jon R. Hawks, Ltd., 236 F.3d 446 (8th Cir. 2001). Bona fide error defense does not apply to errors of legal judgment.
Jenkins v. Heintz, 124 F.3d 824 (7th Cir. 1997), cert. denied, 523 U.S. 1022 (1998). The collection firm established a bona fide error defense by showing that they did not know that the debt on which they brought suit included a charge for unauthorized forced placed automobile insurance. The attorney collector was not expected to understand the legal intricacies of the retail installment sale on which they brought suit.
Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507 (9th Cir. 1994). To establish a bona fide error defense the collector must demonstrate ‘‘the maintenance of procedures reasonably adopted to avoid any such error.’’
Pipiles v. Credit Bureau Inc., 886 F.2d 22 (2d Cir. 1989). The bona fide error defense did not excuse a mistaken view of the law.
Hulshizer v. Global Credit Servs., Inc., 728 F.2d 1037 (8th Cir. 1984). The bona fide error defense was not available to a collector who intentionally disregarded the plain language of the FDCPA and relied on the mistaken legal advice of an FTC staff attorney and the American Collectors Association.
Bernstein v. Howe, 2003 WL 1702254, 2003 U.S. Dist. LEXIS 5284 (S.D. Ind. Mar. 31, 2003). With regard to the bona fide error defense, the majority view is that it is only available for clerical and factual errors. To the extent that the bona fide error defense is applicable to mistakes of law, the mistakes must not only be unintentional but also reasonable.
Johnson v. Riddle, F. Supp. 2d , 2003 WL 22995172 (D. Utah Dec. 15, 2003). The intent element of the bona fide error defense focuses on whether the defendant intended to violate the FDCPA, not whether he intended to engage in the collection efforts giving rise to the violation. The bona fide element of the bona fide error defense is an objective test to determine whether a reasonable debt collector in the defendant’s position would have appreciated that the collection conduct would be in violation of the Act. The defendant collection attorney was granted summary judgment on his bona fide error defense arising from his collection of excessive statutory shoplifting penalties from writers of dishonored check, a practice later determined by an appellate court to be unlawful, because the violation was subjectively unintentional since the attorney initially had thoroughly researched the issue and the practice had appeared to be approved by state trial judges entering default judgments in several cases. The error was a bona fide error that occurred notwithstanding the maintenance of procedures designed to avoid the violation.
Frye v. Bowman, Heintz, Boscia & Vician, P.C., 193 F. Supp. 2d 1070 (S.D. Ind. 2002). Since the form of summons at issue matched summons forms approved by the court clerks, the bona fide error defense would apply to this type of error of law, provided that the collectors could meet the other conditions for bona fide error to apply. If the collectors did not intend to violate the FDCPA and had procedures in place to avoid violating the FDCPA, the error was unintentional, even if the violating act itself was intentional.
Kort v. Diversified Collection Servs., Inc., 2003 WL 21542552 (N.D. Ill. July 8, 2003). The collector’s use of letters drafted by the Department of Education was sufficient to establish a bona fide error defense.
Allen v. NCO Fin. Servs., Inc., 2002 U.S. Dist. LEXIS 10513 (N.D. Ill. June 10, 2002). Collector failed to demonstrate a bona fide error defense where it produced no documents or affidavits of the procedures it had in place to avoid such computer errors.
Hartman v. Meridian Fin. Servs., Inc., 191 F. Supp. 2d 1031 (W.D. Wis. 2002). Debt collector’s purported misunderstanding of its legal obligations under the FDCPA did not qualify as an error for the bona fide error defense. Debt collector could not avail itself of the bona fide error defense since it did not have in place any relevant preventative procedures.
Shula v. Lawent, 2002 WL 31870157 (N.D. Ill. Dec. 23, 2002). Although the collector failed to plead the bona fide error defense, use of a former lawyer’s letterhead was not a violation of the FDCPAwhere the consumer failed to demonstrate any prejudice or harm suffered as a result of the erroneous substitution.
Cook v. Gen. Revenue Corp., 2001 U.S. Dist. LEXIS 11181 (E.D. Pa. Aug. 6, 2001). Debt collector’s motion to dismiss was denied because the consumer alleged adequate facts to state a claim: that the debt had been paid, suit was time barred, and the collection lawyer wrote unobligated relatives about the alleged debt. The collector failed to demonstrate a bona fide error defense.
Edwards v. McCormick, 136 F. Supp. 2d 795 (S.D. Ohio 2001). The Sixth Circuit has explicitly held that the bona fide error defense applies only to clerical errors. Though there is no doubt the principal may lawfully assign his agent the responsibility of performing the ‘‘error-catching’’ procedures required to invoke the protection of § 1692k(c), when the principal himself has an essential role in the actual procedure, an abdication of that responsibility necessarily destroys the effectiveness of the procedure
itself. A debt collector may rely upon information provided by his client, and § 1692k(c) will protect from FDCPA liability a debt collector who is not willfully blind to the inaccuracy of such information directly attributable to mistakes of the client.
Hill v. Priority Fin. Servs., Inc., 2001 U.S. Dist. LEXIS 16900 (S.D. Ind. Sept. 28, 2001) (not for publication). The bona fide error defense did not shield those who simply misunderstood the obligations imposed by the FDCPA. The FDCPA clearly states that the debt collector bears the burden of establishing the bona fide error defense by a preponderance of the evidence.
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