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9th circuit FDCPA opinion: Reichert v. National Credit System

An EXCELLENT decision by the 9th circuit court of appeals. 

Bona Fide Error Defense Requires Bona Fide Procedures, Ninth Circuit Holds

The Ninth Circuit today upheld summary judgment for a debtor against a debt collection agency under the Fair Debt Collection Practices Act.  The agency had purported to verify to the debtor that he owed, in addition to an amount due under a residential lease, a $225 fee for the landlord’s cost of having a lawyer write a demand letter.  But the lease allowed recovery of such a fee only if the landlord sued.  Oops.

The debt collector invoked the bona fide error defense under section 1692k(c) of the FDCPA.  It asserted, in a declaration, that the landlord had always given it accurate information in the past and that it therefore reasonably relied on the false information about the landlord’s entitlement to tack on the fee. 

The Ninth Circuit rejected the defense.  It noted that the statute requires proof that “the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” Reliance on a creditor to get the numbers right doesn’t raise a fact issue that the agency maintained “procedures reasonably adapted to avoid” a mistake in the creditor’s representations.  “The procedures themselves must be explained, along with the manner in which they were adapted to avoid the error.” Reichert v. Nat’l Credit Systems, Inc., No. 06-15503, slip op. at 8 (9th Cir. July 7, 2008).

Collectors always rely on the bona fide error defense and I sure wish I had this opinion a year ago at the Focus Receivables settlement conference.

Which reminds me, I have to update on the Focus appeal.  Scumbag liar/lawyer Cynthia Fulton filed a motion to dismiss and falsely stated that she served me electronically.  The 9th circuit appeals court electronic filing system is still being developed and I was VERY lucky they didn’t dismiss my case since I didn’t oppose the motion I didn’t receive until AFTER the court denied it.

I’ve asked the court to revoke Fulton’s privilege to practice in the appeals court and have to pick up her response at the post-office, will update shortly.

It is such a struggle.  The attorney for Reichert was Deepak Gupta from Washington D.C., so I believe he is the Public Citizen attorney:

Deepak Gupta is a staff attorney at Public Citizen Litigation Group in Washington, DC, where his practice focuses on consumer and constitutional litigation.

And I’ll try to get the actual filings from the district court in Reichert v. National Credit System for posting at CreditFactors.  Unfortunately, as I found out when I tried to get the Focus motion to dismiss, the appeals court does not mail filings, not even for if you pay 50 cents/page for copying plus postage and I sure can’t afford to hire a legal service in San Francisco to get the briefs. 

Here is the opinion:

http://www.ca9.uscourts.gov/ca9/newopinions.nsf/2202ACCF90C8382B8825747F00577E69/$file/0615503.pdf

Congrats on this one!  Hopefully the tide is turning in your favor.
I rarely agree,on legal basis, w/ any of 9th district rulings. Must remember it is pres election year, so strike while this short window of justice is open.
Also remember that candidates rarely keep any of the promises they make. At least as far as demonkraps & repukicans are concerned.

You brought up a good point, it’s an election year. 

It’s been a year since I filed my appeal reply brief regarding the credit limits and I still don’t have a ruling.  Maybe they’re waiting till after the elections.

Can’t say that there’s any candidate I like or support and every so-called consumer protection legislation gives the bankers and corporations more power—when you read the fine print in the final bill.