74 F.4th 429
7th Cir.2023Background
- Paul Camarena defaulted on a debt before marrying Kara Ross; Ross is not legally responsible for the debt but shares a phone with Camarena.
- FAMS mailed Camarena a validation notice (Oct. 15, 2020) directing disputes via its website or postal address; Camarena did not follow those channels.
- Camarena reconstructed FAMS executive email addresses and emailed the CEO and VP to dispute the debt; those emails were not forwarded to client services, so FAMS never received the dispute and never validated the debt.
- FAMS called Ross multiple times (Oct.–Nov. 2020); Ross told callers the number was not Camarena’s and refused to give his number; some calls were disconnected and Ross alleges at least two hang-ups.
- Ross sued under the FDCPA (15 U.S.C. §§ 1692g(b), 1692d, 1692d(5)); the district court granted summary judgment for FAMS. The Seventh Circuit affirmed, resolving the case on the bona fide error defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ross is a “consumer” and FAMS violated §1692g(b) by continuing collection after dispute | Ross: Camarena disputed the debt and FAMS continued collection without validating the debt | FAMS: Ross is not a consumer; in any event FAMS is entitled to bona fide error defense | Court assumed arguendo Ross could be a consumer but held bona fide error defense bars liability |
| Whether FAMS violated §§1692d and 1692d(5) by repeatedly calling Ross and by alleged hang-ups (intent to annoy) | Ross: repeated calls and two hang-ups show intent to annoy/harass | FAMS: calls were inadvertent errors; bona fide error defense applies | Court held bona fide error defense precludes liability on these claims |
| Whether FAMS satisfied the third element of the bona fide error defense (procedures reasonably adapted) | Ross: training alone insufficient; should have procedures to catch officer-forwarded emails and prevent repeated miscodes | FAMS: multi-layered procedures (notice directing disputes to website/mail, not publishing exec emails, training to forward exec emails, client-services coding, software blocks, audits) were reasonably adapted | Court found FAMS’s procedures reasonably adapted and distinguished cases involving routine-process failures |
Key Cases Cited
- Kort v. Diversified Collection Servs., Inc., 394 F.3d 530 (7th Cir. 2005) (sets out bona fide error defense elements)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (defense requires mechanical or regular orderly steps)
- Ewing v. MED-1 Sols., LLC, 24 F.4th 1146 (7th Cir. 2022) (application of bona fide error defense; fact‑intensive inquiry)
- Leeb v. Nationwide Credit Corp., 806 F.3d 895 (7th Cir. 2015) (procedures that say to bar action but give no steps are not reasonably adapted)
- Abdollahzadeh v. Mandarich L. Grp., LLP, 922 F.3d 810 (7th Cir. 2019) (illustrates range of acceptable procedures)
- Frey Corp. v. City of Peoria, 735 F.3d 505 (7th Cir. 2013) (failure to develop arguments below results in waiver)
- Holcomb v. Freedman Anselmo Lindberg, LLC, 900 F.3d 990 (7th Cir. 2018) (standard of review for cross-motions for summary judgment)