7th Circuit affirms debt collector verification of debt satisfies FDCPA and FCRA

Courts Appellate Seventh Circuit FDCPA FCRA

On March 21, the U.S. Court of Appeals for the 7th Circuit held that a debt collector does not need to contact an original creditor directly in order to satisfy the verification of debt requirement under the FDCPA. According to the opinion, a consumer filed a lawsuit against a debt collection company for, among other things, allegedly violating Section 1692 of the FDCPA, which requires that a debt collector obtain verification of a debt. The debt collector had sent multiple notices to the consumer regarding a telecommunications debt, but certain digits of the original account number were incorrect. The consumer argued that the debt collector was obligated to contact the telecommunications company to confirm the account number was accurate. The district court granted summary judgment in favor of the debt collector, agreeing that the debt collector’s responsibility under Section 1692 was satisfied when the notices sent to the consumer matched the telecommunications company’s description of the debt amount and debtor’s name. In affirming the lower court’s decision, the 7th Circuit stated “[i]t would be both burdensome and significantly beyond the [FDCPA]’s purpose” to “require[e] a debt collector to undertake an investigation into whether the creditor is actually entitled to the money it seeks.”

The 7th Circuit also affirmed summary judgment for the debt collector with respect to allegations that it violated the FCRA by inadequately investigating the disputed debt. The court, noting that the debt collector’s “investigation was unquestionably reasonable,” concluded that the debt collector satisfied the requirements of the FCRA when it (i) verified the consumer’s information with her debt collection file; and (ii) after learning that the consumer disputed the accuracy of the account number associated with the debt, asked the credit reporting agencies to delete the adverse credit report.