A district court in Texas, in Young v. ProCollect, Inc. (N.D. Tex. Feb. 21, 2019), granted summary judgment in favor of a defendant debt collector, ProCollect, Inc., where claims were asserted by the plaintiff, Ronnie Young, on behalf of himself and a putative class, under the Fair Debt Collection Practices Act.

In the complaint, Young alleged that ProCollect violated the FDCPA by sending him a debt collection letter offering to settle an alleged debt owed by him. The letter stated that Young’s balance on the account was $0.00 but that $7.50 was owed. According to the district court’s review of the record, ProCollect received a letter from Young disputing that monies were owed. ProCollect also received a payment from Young for the alleged amount owed; upon receiving the payment, ProCollect marked the account at issue as “paid in full.” Thereafter, Young’s spouse contacted ProCollect to obtain proof of payment, and “the employee who took the call obtained the spouse’s email address and emailed a ‘paid in full’ letter.” However, “[d]uring the process of taking the call and generating the letter, the employee moved the account from the ‘paid in full’ category to the ‘information request return’ category, and neglected to return the account to the ‘paid in full’ category, which had the effect of causing defendant’s records to show that the account was active again.” As a result, the debt collection letter central to the case was generated, stating that Young’s account had a $0.00 balance, but listed a collection fee of $7.50 as due.

The Court held that (i) “the FDCPA does not apply to the conduct at issue in this case, which occurred after the debt was paid,” and (ii) “defendant is entitled to the bona fide error defense under 15 U.S.C. § 1692k(c). In doing so, the Court determined:

The law is clear that once a consumer has paid a debt in full, there is no debt as defined in the FDCPA and the FDCPA does not apply to post-collection activities. Here, as in those cases, plaintiff paid his debt in full and defendant properly noted that the debt was paid and so reported it. The July 7 letter was an obvious mistake and not an attempt to collect the debt, which had been paid in full. And, indeed, plaintiff was notified on multiple occasions that such was the case.

[…]

Even if the FDCPA applied, and it does not, defendant is entitled to the bona fide error defense. That is, a debt collector may not be held liable if the debt collector shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid such error. 15 U.S.C. § 1692k(c). In response, plaintiff simply argues that whether defendant is entitled to the bona fide error defense is a fact question. He has not, however, come forward with any summary judgment evidence to rebut the declaration supporting defendant’s motion. Defendant has met its burden of establishing the defense and is entitled to judgment.

(emphasis added and internal citations omitted).

Based on the district court’s decision, it is clear the debt at issue in an FDCPA case must be closely analyzed and understood. Moreover, the bona fide error defense under 15 U.S.C. § 1692k(c) is a critical tool in the defense of FDCPA claims.