Successful FDCPA Action

Posted by on Jul 22, 2015 in Blog | 0 comments

Litigation

Dan Vedra and Ahson Wali are proud to announce the successful prosecution of a Fair Debt Collection Practices Act (FDCPA) suit against Credit Bureau of Carbon County d/b/a CollectionCenter, Inc. In the case, the consumer contacted the debt collector on three separate occasions to notify the debt collector that insurance should have paid her medical bills. The Debt Collector maintained that arguing that insurance should have paid the bills was not a “dispute” within the meaning of Section 1692e(8).

The Court found that “a statement that insurance should have paid an alleged debt is a dispute within the meaning of Section 1692e(8)” and “consistent with the plain meaning of ‘dispute'”. Because the FDCPA prohibits a debt collector from “[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed . . .”, the Debt Collector had an affirmative duty to report the dispute any time the Debt Collector reported the plaintiff’s debt to a credit bureau. The Debt Collector did not, and judgment entered against the Debt Collector. The District Court for the District of Colorado awarded the maximum amount of statutory damages allowed under the FDCPA. A copy of Judge Kane’s Findings of Fact and Conclusion of Law is available here.

This is an important decision for consumers. Medical bills that are not correctly billed to insurance carriers are frequently turned over to debt collectors for collection. Although most hospitals do not report unpaid bills on a credit report, debt collectors do. This can harm a consumer’s credit rating and affect the consumer’s ability to obtain credit, afford insurance, and even gain employment. Debt collectors cannot turn a blind eye to disputes regarding insurance liability for a debt.

As Congress long ago found, abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy. Dan Vedra and Ahson Wali are consumer lawyers who enforce consumer rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

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