Our Moreno Valley debt collection lawyers, led by name partner Vincent Howard, frequently represent the interests of people being pursued by debt collectors. Unfortunately, many of our bankruptcy clients turn to us after a long history of harassment by debt collectors. However, debt collectors also overstep their bounds with people who are not in a position to file for bankruptcy -- sometimes including people who genuinely don't owe the debt and may be victims of mistaken identity. That was the contention of James Dunham, the lead plaintiff in Dunham v. Portfolio Recovery Associates, a Fair Debt Collection Practices Act lawsuit. Dunham was contacted by PRA about a debt listed under the wrong Social Security number, and eventually filed a putative class-action lawsuit under the FDCPA.
PRA buys bad debt from other debt collectors, so it's an extra step removed from the original creditor. It is now undisputed that Dunham does not owe the debt. At the time when he received the notice, he never contacted PRA; he simply sued in Arkansas federal court, alleging PRA did not include required information validating the debt with the original creditor. PRA claims it learned about the mistake for the first time at a deposition. It moved for summary judgment, arguing that Dunham lacked standing because he was not a "consumer" under the Fair Debt Collection Practices Act. Because PRA alleged that a different James Dunham owed the debt, the district court found, this James Dunham is not "any natural person obligated or allegedly obligated to pay any debt." For the same reason, the federal court denied a sanction request filed by Dunham as moot, and denied class certification because Dunham would be ineligible as a class representative. Dunham appealed.
On appeal, the Eighth Circuit rejected the district court's idea that the FDCPA provides no remedy for cases of mistaken identity. The plain meaning of "allegedly" under "allegedly obligated to pay any debt" includes mistaken allegations, the court said., and the FTC has in fact interpreted the FDCPA that way. However, the Eighth exercised its right to uphold the lower court for any reason in the record, and ultimately rejected Dunham's appeal. It agreed with PRA that the debt collector had sufficiently verified Dunham's debt. After Dunham submitted a written dispute under the FDCPA, PRA sent him all of the required information, which allowed him to realize at a glance that they had the wrong James Dunham. The FDCPA does not, as Dunham suggested, require creditors to obtain further background information from the original creditor and share it with debtors, the Eighth said. Several sister circuit decisions support this, it said, and a contradictory conclusion might require debt collectors to send the confidential information of the true debtor to another person.
As Santa Ana fair debt collection attorneys, we always prefer more information and more rights for debtors or people wrongly accused of being debtors. But at Howard Law, P.C., we do appreciate that this decision squelches the rather novel idea that victims of mistaken identity cannot hold the debt collector legally liable for failing to check. By ignoring the word "allegedly" in the FDCPA, the district court in essence shut out people who are victims of bad collection agencies that don't bother doing their homework or complying with the law. In our own practice, we've seen cases in which failure to know or care which person a debt collector is contacting is followed up by phone calls at illegal hours, lies, threats and other blatantly illegal debt collection tactics. Such a victim would be exactly who the FDCPA and its California analogue, the Rosenthal Act, were designed to protect. Our Los Angeles County debt collection harassment lawyers are proud to defend consumers from this type of harassment, regardless of whether they owed the debt.
If you've been verbally abused or otherwise harassed by debt collectors and you'd like to fight back, Howard Law, P.C., can help. Call us today for a consultation at 1-800-872-5925 or send us a message online.