Consumer Finance Litigation

In Stinson v. Receivables Management Bureau, Inc., No. 2:12-cv-02558, 2013 WL 1278966 (N.D. Ala. Mar. 26, 2013), an Alabama federal court recently held that a debt collector's telephone calls made to a non-debtor did not violate the FDCPA when the actual debtor provided the telephone number and the non-debtor plaintiff failed to inform the debt collector of the error. Plaintiff Jesse Stinson filed suit against Receivables Management Bureau, Inc. ("RMBI") alleging violations of the FDCPA and state law after RMBI made several telephone calls to his house attempting to collect a debt owed by Michael Bole. Bole lived at Stinson's house temporarily and provided Stinson's home phone number to the original creditor. RMBI moved for summary judgment. In support of its motion, RMBI argued that Stinson's claims under § § 1692a(2) and 1692d(5) failed because Stinson lacked standing to assert those claims, its conduct did not establish liability, and it was entitled to the bona fide error defense. The court first determined that Stinson's § 1692a(2) claim failed because this provision contains the definition of "communication" and does not provide a cause of action. Additionally, the court found that Stinson was not a "consumer" as defined by § 1692a(3), as he was not obligated to pay the debt. Thus, the court found that RMBI could not be liable under § § 1692a(2) or 1692g(a), which addresses communication with consumers. Addressing Stinson's § 1692d(5) claim, the court found that it also failed because Stinson was not a "consumer." Further, the court determined that RMBI's conduct did not rise to the level to establish liability because Stinson never informed RMBI that it had the wrong number and that "a claim based solely on the number of calls is insufficient to raise a cause of action because . . . a plaintiff must also show that the creditor engaged in other inappropriate conduct." Because RMBI called and left messages at appropriate times without knowing that it had the wrong number, the court dismissed Stinson's § 1692d(5) claim. Finally, the court addressed RMBI's bona fide error defense and found that RMBI implemented procedures to avoid errors and that those procedures were reasonably adapted to avoid the error at issue. Importantly, the court also determined that the FDCPA does not require RMBI to have written procedures to invoke the bona fide error defense. Thus, the Court granted RMBI's motion for summary judgment on Stinson's FDCPA claims. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.