FDCPA Violation – Bona Fide Error

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7^th Circuit Court of Appeals

Case Name: Mehdi Abdollahzadeh v. Mandarich Law Group, LLP

Case No.: 18-1904

Officials: WOOD, Chief Judge, and SYKES and BARRETT, Circuit Judges.

Focus: FDCPA Violation – Bona Fide Error

Mehdi Abdollahzadeh opened a credit-card account with MBNA America Bank in 1998 and used it to make various personal, family, and household purchases. Twelve years later he defaulted on his debt, making his last payment in August 2010. In June 2011 he attempted another payment, but it never cleared. In April 2013 the bank sold the delinquent account to CACH, LLC, a debt buyer. Abdollahzadeh sued Mandarich for attempting to collect a time-barred debt in violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA” or “the Act”). His claims centered on the collection letter and the state-court collection action. Mandarich moved for summary judgment citing the bona fide error defense. Id. § 1692k(c). The district court granted the motion, concluding that the violations were unintentional and occurred despite reasonable procedures aimed at avoiding untimely collection attempts.

Abdollahzadeh challenges that ruling on several grounds. First, he argues that Mandarich’s continuation of the collection action after it learned the true last-payment date creates a factual dispute on the issue of intent. He also contends that the law firm’s reliance on CACH’s representations about the last-payment date was an abdication of its duty to engage in meaningful review and thus was unreasonable as a matter of law. Finally, he characterizes the firm’s procedures for weeding out time-barred debts as “thinly specified policies” insufficient to support the affirmative defense.

We reject these arguments and affirm. The bona fide error defense doesn’t require the independent verification and procedural perfection Abdollahzadeh seems to think necessary. The undisputed evidence shows that any FDCPA violations were the unintentional result of a bona fide mistake. And Mandarich had procedures in place that, while simple, were reasonably adapted to avoid late collection efforts.

Affirmed

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.