Court Foils Attempt at Creating an FDCPA Violation by Sending C&D Request to Parent Company

On Friday of last week, the Northern District of Illinois foiled what appears to be an attempt by a consumer attorney to drum up a Fair Debt Collection Practices Act (FDCPA) violation by a debt collector. Garcia v. Miramed Revenue Grp., LLC, No. 18-cv-1384 (N.D. Ill. Aug. 16, 2019) is an example of the litigation dilemma faced by debt collectors as previously discussed on insideARM.

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In this case, the plaintiff had a past-due medical debt that the service provider placed with Miramed Revenue Group (Miramed) for collection. Miramed sent a collection letter that contained phone numbers, an address where the plaintiff can send correspondence, and a link to a website where the plaintiff can make a payment. Notably, there was no email address or invitation to email communications on the letter.

Despite the letter's clear instructions on how to communicate with Miramed, the plaintiff’s attorney sent a message through a completely separate website's "contact us" section. Miramed’s affiliated parent company Miramed Global, which is not a debt collector, owned this website. The message requested that Miramed—not the parent company—stop calling the plaintiff’s cell phone. The court notes that the law firm “used Microsoft’s snipping tool to screenshot the contents of the message and saved that screenshot to its server.” 

After Miramed continued to place calls to plaintiff’s phone number, the plaintiff sued—represented by the same law firm that sent the communication to the plaintiff’s parent company. Defendant filed a summary judgment motion on the issue, which the court granted.

At first, the decision looks a little grim because the court found that the bona fide error defense did not apply. While the parent company would forward messages that it thought were meant for Miramed, there were no policies and procedures in place to ensure this happened. Typically, only “a handful” of messages would get forwarded per month.

The decision then takes a positive turn. The court granted summary judgment in favor of Miramed, finding that there was no evidence that it received the message, which is a requirement for a cease and desist request under the FDCPA.

The court states:

Though a reasonable juror could conclude that Miramed Global received the request, given the lack of procedures in place requiring it to pass along relevant messages, that does not mean that Miramed received it. That Miramed Global sometimes forwarded messages it thought were intended for Miramed, does not allow the inference that Miramed received Garcia’s message.

…

Though the two companies are affiliated, they are not the same, and notice to one does not automatically count as notice to the other.

insideARM Perspective

This is not a unique situation. Debt collectors regularly deal with these types of crafty violation baiting attempts. Some examples include:

• A jury finding Lexington Law guilty of fraud by sending mass volumes of dispute letters to debt collectors.
• The call baiting about whether the account can be disputed over the phone.
• Consumers baiting violations via scripts typically obtained from consumer attorneys.

With the one-sided nature of the attorney fee provision and the strict liability nature of the FDCPA, these types of attempts are unlikely to go away. It creates an easy target, even of debt collectors who in good faith try to do right by consumers and comply with the myriad federal and state requirements governing the industry. The good news is that the Consumer Financial Protection Bureau has taken notice, at least indirectly, and brought its own lawsuit against Lexington Law.