7th Circuit upholds summary judgment for debt collector

A debt collection agency that reported an Indiana woman’s disputed debt to two national credit reporting agencies did not violate federal law relating to debt collection and credit reporting actions, the 7^th Circuit Court of Appeals has affirmed.

In Deborah Walton v. EOS CCA, 17-3040, Deborah Walton was notified in in October 2014 that she owed $264.47 on her closed AT&T account. When Walton failed to pay the bill by January 2015, she received a letter from EOS CCA instructing her to either pay or dispute the debt, but the letter incorrectly listed her AT&T account number.

Thus, Walton disputed that the debt belonged to her, falsely telling an EOS representative that the last four digits of her Social Security number did not match the digits the representative gave her to verify her identity. She also sent EOS a letter stating she did not owe any money under the account number provided.

EOS, however, verified Walton’s identity — including the last four digits of her Social Security number — and reported the debt to Experian and TransUnion, noting that it was disputed. Walton disputed the debt to the credit-reporting agencies as well, prompting EOS to recheck its records and verify that Walton’s personal information matched the information it received from AT&T. However, when Walton reported the incorrect account number to the reporting agencies, EOS asked them to delete her debt record.

Walton then sued EOS, alleging violations of the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Specifically, Walton alleged EOS failed to verify her debt with AT&T and did not reasonably investigate the disputed information.

The U.S. District Court for the Southern District of Indiana ultimately entered summary judgment in favor of EOS, and the 7^th Circuit Court of Appeals upheld that ruling in a Wednesday opinion. Recently appointed Judge and Notre Dame Law professor Amy Coney Barrett wrote for the appellate court that the requirements under the Fair Debt Collection Practices Act required EOS only to confirm that the notice it sent to Walton matched the information it received from AT&T, which it did in this situation.

“The verification assures the consumer that the creditor actually made the demand the debt collector said it did and equips the consumer to evaluate the validity of the creditor’s claim,” Barrett wrote. “It would be both burdensome and significantly beyond the Act’s purpose to interpret (15 U.S.C. 1692g(b)) as requiring a debt collector to undertake an investigation into whether the creditor is actually entitled to the money it seeks.”

Similarly, EOS adhered to the FCRA by rechecking its records when Walton disputed the debt with Experian and TransUnion, Barrett said. The court also upheld the consolidated briefing on the parties’ cross-motions for summary judgment, and the magistrate judge’s decision to deny her motion to strike EOS’ combined motion and response, finding both procedural challenges were meritless.