Seventh Circuit Upholds Debt Collector's Investigation Of Consumer's Disputes As Reasonable Under FDCPA And FCRA

Author:Mr Timothy St. George, James Trefil and Stephen Lozier
Profession:Troutman Sanders LLP

The United States Court of Appeals for the Seventh Circuit recently affirmed a lower court decision finding that a debt collector's verification and investigation of a consumer's disputes through its review of records obtained from the creditor was both satisfactory under the Fair Debt Collection Practices Act and reasonable under the Fair Credit Reporting Act. The case is Deborah Walton v. EOS CCA, No. 17-3040 (7th Cir. Mar. 21, 2018).

Originally filed in the Southern District of Indiana in 2015, this matter arose out of a debt consumer plaintiff Deborah Walton owed to AT&T. After notifying Walton of her delinquency, AT&T assigned or sold the debt to EOS for collection. However, the records AT&T transferred to EOS contained the wrong account number for Walton's debt.

EOS subsequently mailed Walton a collection letter in an attempt to collect the debt. Walton recognized the inaccurate account number and disputed the debt with EOS over the phone and by letter. EOS confirmed the account information through a review of the records it received from AT&T and sent Walton a letter that verified that the information included in its debt collection letter was accurate. Walton alleges EOS' review of the account documents without specifically verifying the underlying debt with AT&T was a violation of the FDCPA.

Following Walton's dispute, EOS reported Walton's debt to TransUnion and Experian with a notation that the debt was disputed. Walton then disputed EOS' reporting of the debt with these entities. The reports generated by the credit reporting agencies for EOS stated that Walton claimed the account was not hers. Again, EOS reviewed its internal records and verified Walton's debt. Walton disputed the debt a second time, this time claiming the account number associated with the debt was inaccurate. Upon receipt of this dispute, EOS requested deletion of the credit reports at issue. Walton alleges EOS' investigation of her disputes was not reasonable under the FCRA.

The district court found that EOS satisfied its legal obligations under the FDCPA and FCRA in reviewing Walton's disputes and granted EOS' motion for summary judgment. Walton appealed and the Seventh Circuit affirmed the lower court's findings. In doing so, the...

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