Seventh Circuit Joins Others on Debt Validation Requirements

The Seventh Circuit recently joined the Fourth and Ninth Circuits in holding that a debt collection discharges its obligation as to debt validation by verifying that its letters accurately conveyed the information received from the creditor.  Walton v. EOS CCA, 2018 U.S. App. LEXIS 7075 (7^th Cir. Mar. 21, 2018).  In Walton, AT&T forwarded the consumer’s account to EOS CCA for collection.  In doing so, AT&T inadvertently transposed the account number.  As a result, when EOS CCA sent its collection letter to the consumer and reported it to the credit reporting agencies, it likewise misstated the account number. Ms. Walton disputed the debt as a result and EOS CCA responded, stating that “based on ‘a review of our records,’ it had verified her name, address and the last four digits of her social security number matched the debt report it had received from AT&T.”  Id. at *2-3.

Ms. Walton filed suit alleging, among other things, that EOS CCA had violated 15 U.S.C. 1692g by not verifying the debt with the creditor.  The district court granted summary judgment in favor of EOS CCA.  The Seventh Circuit affirmed.  In doing so, the court noted that the purpose of the FDCPA is “to eliminate abusive debt collection practices by debt collectors.”  Id. at * 5 (emphasis supplied).  The court determined that consistent with that purpose, it as sensible to construe §1692g(b) as requiring “a debt collector to verify that its letters accurately convey the information received from the creditor.”  Id. at *6.  The court was dismissive of the additional requirement advocated by the consumer, that the debt collector should be required to undertake an investigation of whether the creditor is actually entitled to the money it seeks.  The court concluded that such a requirement would be unduly burdensome and beyond the Act’s purpose.  Because section 1692g(b) serves as a check on the debt-collection agency and not the creditor, the court determined that EOS CCA satisfied the statute when “[i]t checked its records and confirmed that the Deborah Walton to whom it had set a debt-collection letter was the same Deborah Walton identified by AT&T.”  Id. at *6-7.  The court likewise approved the communication by EOS CCA validating the debt, noting that EOS CCA sent Walton a notice that confirmed it had sent the demand to the person AT&T identified and for the amount AT&T sought and provided AT&T’s address. 

The decision is good news for the debt collection industry and confirms the narrow obligations provided by section 1692g(b).  The court’s decision joins decisions from the Fourth and Ninth Circuit which held similarly.  See Chaundry v. Gallerizzo, 174 F.3d 394 (4^th Cir. 1999); Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162 (9^th Cir. 2006).