Katherine Evans v. Portfolio Recovery Associates, LLC Morelaw Internet Marketing for Legal Professionals MoreLaw Can Make Your Phone Ring 888-354-4529

This appeal concerns four consolidated

cases involving similar alleged violations of the Fair

Debt Collection Practices Act (“FDCPA”), 15 U.S.C.

§ 1692e(8). Plaintiffs defaulted on credit cards, and defendant

Portfolio Recovery Associates (“PRA”), an Illinois debt collection

agency, bought the accounts for collection. The Debtors

Legal Clinic (the “Clinic”) sent separate letters on behalf of

each plaintiff to PRA, stating “the amount reported is not accurate.”

PRA later reported each debt to credit reporting

agencies without noting that the debt was “disputed.” Plaintiffs

each filed a suit against PRA for violations of the FDCPA,

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 3

alleging that PRA communicated their debts to credit reporting

agencies without indicating they had disputed the debt.

The district courts granted summary judgment in favor of

plaintiffs. We affirm.

I. Background

A. Factual Background1

Each plaintiff defaulted on their credit card account, and

PRA purchased the debts from the original creditors. As required

by 15 U.S.C. § 1692g, PRA sent plaintiffs validation letters

detailing the debt.2 Each plaintiff then sought the advice

of the Clinic, a non‐profit legal aid organization. More than

thirty days after PRA sent the validation letters, Andrew

Finko, a volunteer attorney at the Clinic, faxed separate letters

to PRA on behalf of each plaintiff (hereinafter, the “Letters”).

The Letters stated:

This letter is concerning the above referenced debt.

1 The following facts apply to all plaintiffs. For specific details relating

to each plaintiff, we refer the reader to the district court’s individual summary

judgment rulings. See Paz v. Portfolio Recovery Assocs., LLC, No. 15‐

cv‐5073, 2016 WL 6833932 (N.D. Ill. Nov. 21, 2016); Evans v. Portfolio Recovery

Assocs., LLC, No. 15‐cv‐4498, 2016 WL 6833930 (N.D. Ill. Nov. 20, 2016);

Bowse v. Portfolio Recovery Assocs., LLC, 218 F. Supp. 3d 745 (N.D. Ill. 2016);

Gomez v. Portfolio Recovery Assocs., LLC, No. 15‐cv‐4499, 2016 WL 3387158

(N.D. Ill. June 20, 2016).

2 The letters included: (1) “the amount of the debt”; (2) “the name of

the creditor to whom the debt is owed”; (3) a statement that the amount

of debt will be assumed valid unless disputed within thirty days; (4) a

statement that if the debt is disputed, the debt collector will obtain verification

of the debt; and (5) a statement that the debt collector will provide

the name and address of the original creditor if requested. See 15 U.S.C.

§ 1692g(a). No plaintiff disputed the debt within thirty days.

4 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

Debtors Legal Clinic is a non‐profit legal services organization

that advises senior citizens, veterans, and

low‐income individuals whose income is protected by

law of their rights under various state and federal statutes.

Our clinic represents the above referenced client

for the purposes of enforcing their rights pursuant to

all applicable debt collection laws.

This client regrets not being able to pay, however, at

this time they are insolvent, as their monthly expenses

exceed the amount of income they receive, and the

amount reported is not accurate. If their circumstances

should change, we will be in touch.

Our office represents this client with respect to any and

all debts you seek to collect, now or in the future, until

notified otherwise by our office. As legal representative

for this client, all communication must be through

our office, please do not contact them directly.3

If you wish to discuss this matter, please contact our

office directly at [phone number] to speak with the attorney

assigned to the matter, Andrew Finko.

Subsequent to receiving the Letters, PRA reported the amount

of the debt, the account number, and the original creditor to

credit reporting agencies. However, PRA did not inform the

credit reporting agencies that the debt was disputed.

3 This paragraph was not included in the letters sent to plaintiffs Evans

and Gomez. Instead, at the end of the last paragraph, those letters included

the sentence: “As legal representatives for this client, all future

communication regarding this debt must be communicated through our

office.”

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 5

PRA admits it received and reviewed the Letters. It says it

treated them as “attorney representation letters,” but did not

believe the Letters communicated disputes. According to

Nyetta Jackson, PRA’s Vice President of Operations:

There was nothing [in the Letters] that indicated that

this was a clear dispute that needed to be processed.

What was clear is that the attorney was letting us know

that they now represent the customer. What was clear

is that they said they didn’t have the money to pay and

they regretted that.

To support this view, Jackson states that Finko did not fax

the Letters to PRA’s special disputes department; rather, he

sent the Letters to PRA’s general counsel. Additionally, Jackson

notes that on prior occasions, Finko sent letters that expressly

stated his client “disputes the debt.”

B. Procedural Background

The plaintiffs alleged that PRA violated 15 U.S.C.

§ 1692e(8), which prohibits debt collectors from “[c]ommunicating

or threatening to communicate to any person credit information

which is known or which should be known to be

false, including the failure to communicate that a disputed

debt is disputed.” Plaintiffs maintained that they “disputed”

the debt when the Clinic sent the Letters to PRA, and PRA

admits that it did not inform the credit reporting agencies that

the debt was disputed. The parties filed cross‐motions for

6 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

summary judgment, and the district courts each granted summary

judgment for plaintiffs. We consolidated PRA’s appeals

for argument and disposition.4

II. Discussion

“We review de novo a district court’s decision on crossmotions

for summary judgment, construing all facts and

drawing all reasonable inferences in favor of the party against

whom the motion under consideration was filed.” Hess v. Bd.

Of Trs. Of S. Ill. Univ., 839 F.3d 668, 673 (7th Cir. 2016). “Summary

judgment is appropriate where there are no genuine issues

of material fact and the movant is entitled to judgment

as a matter of law.” Id. (citing Fed. R. Civ. P. 56(a)).

PRA makes four arguments: (1) plaintiffs did not have Article

III standing; (2) the Letters did not “dispute” the debt

within the meaning of § 1692e(8); (3) even if PRA violated the

statute, the violation was not material; and (4) PRA has a bona

fide error defense under § 1692k(c). We address each in turn.

A. Standing

First, PRA argues that plaintiffs lacked Article III standing.

To establish standing, a plaintiff must show:

4 Other debtors (also represented by the Clinic) filed identical claims

in seven cases not part of this consolidated appeal. In four of those cases,

the parties settled. In two cases, the district courts granted summary judgment

in favor of the plaintiff after this appeal was filed. See Baranowski v.

Portfolio Recovery Assocs., No. 157‐cv‐2939, 2018 WL 1534967 (N.D. Ill. Mar.

29, 2018); Flores v. Portfolio Recovery Assocs., No. 15‐cv‐2443, 2017 WL

5891032 (N.D. Ill. Nov. 29, 2017). In the other case, the district court struck

the parties’ summary judgment motions with leave to refile after we issue

our decision in this appeal. Acosta v. Portfolio Recovery Assocs., No.15‐cv‐

2441 (N.D. Ill. Aug. 17, 2017).

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 7

(1) an “injury in fact,” that is, “an invasion of a legally

protected interest which is … concrete and particularized,

and … actual or imminent”; (2) a causal connection

between the injury and the challenged conduct,

meaning that the injury is “fairly traceable” to the challenged

conduct; and (3) a likelihood “that the injury

will be redressed by a favorable decision.”

Dunnet Bay Const. Co. v. Borggren, 799 F.3d 676, 688 (7th Cir.

2015) (alterations in original) (quoting Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560–61 (1992)). Relying primarily on the

Supreme Court’s recent opinion in Spokeo, Inc. v. Robins, 136 S.

Ct. 1540 (2016), PRA argues plaintiffs do not have standing

because they “did nothing to show that they had an injury in

fact.” We disagree.

In Spokeo, the defendant generated a consumer report that

inaccurately stated the plaintiff’s address, marital status, age,

occupation, finances, and education. Id. at 1546. The plaintiff

filed a class action, alleging the defendant failed to comply

with the Fair Credit Reporting Act (“FCRA”); however, he did

not identify any monetary harm. Id. Although the Court took

no position as to whether the plaintiff actually had standing,

id. at 1550, it expounded on whether violation of a congressional

statute necessarily satisfies the “injury in fact” element.

On the one hand, the Court stressed that a plaintiff “cannot

satisfy the demands of Article III by alleging a bare procedural

violation” because “[a] violation of one of the FCRA’s

procedural requirements may result in no harm.”5 Id. Indeed,

5 As an example, the Court reasoned that “[i]t is difficult to imagine

how the dissemination of an incorrect zip code, without more, could work

any concrete harm.” Spokeo, 136 S. Ct. at 1550.

8 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

the Court stated that “Article III standing requires a concrete

injury even in the context of a statutory violation.” Id. at 1549;

see also Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009)

(“[D]eprivation of a procedural right without some concrete

interest that is affected by the deprivation … is insufficient to

create Article III standing.”).

On the other hand, however, the Court made clear that

“‘[c]oncrete’ is not … necessarily synonymous with ‘tangible.’”

Spokeo, 136 S. Ct. at 1549. The Court affirmed that “Congress

has the power to define injuries and articulate chains of

causation that will give rise to a case or controversy where

none existed before.” Id. (quoting Lujan, 504 U.S. at 580 (Kennedy,

J., concurring in part and concurring in the judgment)).

It emphasized that Congress’s judgment is “instructive and

important” because Congress “is well positioned to identify

intangible harms that meet minimum Article III requirements.”

Id. Therefore, the Court concluded that “the violation

of a procedural right granted by statute can be sufficient in

some circumstances to constitute injury in fact,” such as

where the statutory violation creates “risk of real harm.” Id.

“In other words, a plaintiff in such a case need not allege any

additional harm beyond the one Congress has identified.” Id.

Here, PRA’s alleged violation of § 1692e(8) is sufficient to

show an injury‐in‐fact. Because PRA failed to report to a credit

reporting agency that the debt is disputed, the plaintiffs suffered

“a real risk of financial harm caused by an inaccurate

credit rating.” Sayles v. Advanced Recovery Sys., Inc., 865 F.3d

246, 250 (5th Cir. 2017); see also Saunders v. Branch Banking &

Tr. Co., 526 F.3d 142, 146–47 (4th Cir. 2008) (“[The defendant’s]

decision to report the debt but not the dispute resulted in a

much lower credit score for [the plaintiff] than a report of both

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 9

the debt and the dispute.”). An inaccurate credit report produces

a variety of negative effects. For instance, it is “a red

flag to the debtor’s other creditors and anyone who runs a

background or credit check, including landlords and employers.”

Phillips v. Asset Acceptance, LLC, 736 F.3d 1076, 1082 (7th

Cir. 2013) (quoting Tyler v. DH Capital Mgmt., 736 F.3d 455, 464

(6th Cir. 2013)).

PRA claims that two post‐Spokeo Seventh Circuit opinions

preclude a finding of standing. First, PRA points to Meyers v.

Nicolet Restaurant of De Pere, LLC, 843 F.3d 724 (7th Cir. 2016).

Meyers involved the Fair and Accurate Credit Transactions

Act, which mandates that businesses cannot “print more than

the last 5 digits of the card number or the expiration date upon

any receipt provided to the cardholder.” 15 U.S.C.

§ 1681c(g)(1). A plaintiff brought a class action seeking only

statutory damages after he received a receipt that included

the expiration date of his credit card. Meyers, 843 F.3d at 725.

Citing Spokeo, we dismissed the plaintiff’s claim for lack of

standing. Id. at 727. We concluded that the plaintiff “did not

suffer any harm because of [the defendant’s] printing of the

expiration date on his receipt” and that the violation did not

create “any appreciable risk of harm.” Id. Specifically, we

stressed that the plaintiff “discovered the violation immediately

and nobody else ever saw the non‐compliant receipt.”

Id.

The supposed harm in Meyers is distinct from the harm in

this case; PRA’s action does create an “appreciable risk of

harm.” In Meyers, “it [was] hard to imagine how the expiration

date’s presence could have increased the risk that [the

plaintiff’s] identity would be compromised.” Id. In contrast,

10 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

for the reasons discussed above, it is very easy to envision

harm to the plaintiffs here.

Second, PRA cites Gubala v. Time Warner Cable, Inc., 846

F.3d 909 (7th Cir. 2017). The statute at issue in Gubala was the

Cable Communication Policy Act, which provides that cable

operators “shall destroy personally identifiable information if

the information is no longer necessary for the purpose for

which it was collected.” 47 U.S.C. § 551(e). The plaintiff subscribed

to the defendant’s cable service and provided the defendant

his date of birth, home address, phone numbers, social

security number, and credit card information. Gubala, 846

F.3d at 910. Eight years after cancelling his subscription, the

plaintiff discovered that the defendant still possessed his personal

information and filed a class action. Id. Despite acknowledging

that the defendant violated § 551(e), we held the

plaintiff lacked standing because “[h]is only allegation [was]

that the retention of the information, on its own, ha[d] somehow

violated a privacy right or entailed a financial loss.” Id.

Critically, however, we stressed that “[t]here [was] unquestionably

a risk of harm.” Id. Indeed, we acknowledged

that the plaintiff “may have feared that … his personal information

might have been stolen from [the defendant] or sold

or given away by it, and if so the recipient or recipients of the

information might be using it, or planning to use it, in a way

that would harm him.” Id. But such possibilities could not

support standing because, “[a]lthough it [was] plausible that

he feared this, he never told [the Court] that this is what he

was worried about.” Id.; see also id. at 913 (“Maybe what he’s

trying to say is that he fears that [the defendant] will give

away the information and it will be used to harm him …. But

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 11

he hasn’t said any of that.”). In contrast, plaintiffs here explicitly

alleged a risk of concrete harm—they pointed to the risk

of financial harm as result of credit reporting agencies lowering

their credit score. As such, they have Article III standing.

B. Communication of a Disputed Debt

Turning to § 1692e(8) itself, PRA argues it committed no

violation because the Letters “do not qualify as raising any

type of true dispute, but are a sham, designed to create liability

where no harm to a consumer is threatened.” It maintains

that § 1692e(8) “should be given a reasonable interpretation

as only applying to true disputes that can be understood as

such and meaningfully investigated and addressed.” PRA’s

argument is contrary to the language of § 1692e(8).

The FDCPA makes clear that “[a] debt collector may not

use any false, deceptive, or misleading representation or

means in connection with the collection of any debt.” 15

U.S.C. § 1692e. Specifically, the statute lists as illicit: “Communicating

or threatening to communicate to any person

credit information which is known or which should be known

to be false, including the failure to communicate that a disputed

debt is disputed.” Id. § 1692e(8) (emphasis added).

Plaintiffs each sent a Letter to PRA which stated “the

amount reported is not accurate.” Despite receiving the Letters,

PRA still reported plaintiffs’ debts to credit reporting

agencies without noting that the debt amounts were disputed.

This is a clear violation of the statute.

True, § 1692e(8) does not define “dispute” or provide a

procedure for consumers to follow to dispute their debt. But

the ordinary meaning of “dispute” is clear. See Dispute, Mer12

Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

riam‐Webster Dictionary, http://www.merriam‐webster.

com/dictionary/dispute (last visited April 23, 2018) (defining

“dispute” as “to call into question or cast doubt upon”).

When plaintiffs said “the amount reported is not accurate,”

they “call[ed] into question” the amount PRA claimed they

owed—in other words, they disputed the debt. There is simply

no other way to interpret this language. Each of the district

courts below arrived at the same conclusion. See Paz v. Portfolio

Recovery Assocs., LLC, No. 15‐cv‐5073, 2016 WL 6833932, at

*4 (N.D. Ill. Nov. 21, 2016); Evans v. Portfolio Recovery Assocs.,

LLC, No. 15‐cv‐4498, 2016 WL 6833930, at *2 (N.D. Ill. Nov. 20,

2016); Bowse v. Portfolio Recovery Assocs., LLC, 218 F. Supp. 3d

745, 751 (N.D. Ill. 2016); Gomez v. Portfolio Recovery Assocs.,

LLC, No. 15‐cv‐4499, 2016 WL 3387158, at *3 (N.D. Ill. June 20,

2016). So too did two additional courts, addressing the meaning

of the same statement. Baranowski v. Portfolio Recovery Assocs.,

LLC, No. 15‐cv‐2939, 2018 WL 1534967, at *3 (N.D. Ill.

Mar. 29, 2018); Flores v. Portfolio Recovery Assocs., LLC, No. 15‐

cv‐2443, 2017 WL 5891032, at *3 (N.D. Ill. Nov. 29, 2017).

PRA maintains the Letters did not introduce a dispute because

“there was nothing ‘false, deceptive or misleading’

about what PRA did.” It claims that “[t]he record shows that

these plaintiffs owed the debts and the amounts stated were

accurate.” This argument fails because “our task is to interpret

the words of Congress, not add to them.” Keele v. Wexler, 149

F.3d 589, 595 (7th Cir. 1998). Section 1692e(8) does not require

an individual’s dispute be valid or even reasonable. Instead,

the plaintiff must simply make clear that he or she disputes

the debt. See DeKoven v. Plaza Assocs., 599 F.3d 578, 582 (7th

Cir. 2010) (“[A] consumer can dispute a debt for ‘no reason at

all ….’”). Indeed, “[g]iven the FDCPA’s ‘comprehensive and

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 13

reticulated statutory scheme, involving clear definitions, precise

requirements, and particularized remedies,’ the absence

of an explicit pre‐suit validation requirement is telling.” Russell

v. Absolute Collection Servs., Inc., 763 F.3d 385, 392 (4th Cir.

2014) (quoting Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 233

(4th Cir. 2007)). We decline PRA’s invitation to read into

§ 1692e(8) a requirement that is not in the text.

Additionally, PRA argues the phrase “the amount reported

is not accurate” is somehow ambiguous. It is mistaken.

Section 1692e(8) does not require that the Letter use the word

“dispute.” Indeed, the “knows or should know” standard of

§ 1692e(8) “requires no notification by the consumer … and

instead, depends solely on the debt collector’s knowledge that

a debt is disputed, regardless of how that knowledge is acquired.”

Brady v. Credit Recovery Co., Inc., 160 F.3d 64, 67 (1st

Cir. 1998).6 Thus, it makes no difference that Finko used the

word “dispute” when sending prior letters. Likewise, it is irrelevant

that the Clinic sent the Letters to PRA’s general counsel

rather than the special disputes department.7

Finally, PRA and amicus curiae, the Association of Credit

and Collection Professionals (“ACA International” or “ACA”),

point to other provisions where Congress supposedly gave

6 In fact, the debtor need not even put the dispute in writing to comply

with § 1692e(8). See Sayles, 865 F.3d at 249–50; Brady, 160 F.3d at 66–67.

7 PRA’s observation that “the amount reported is not accurate” is

“tuck[ed] … into [the] representation letters” is worth noting. It is curious

that this phrase is placed between the statements: “This client regrets not

being able to pay”; and “If their circumstances should change, we will be

in touch.” In any event, PRA must follow § 1692e(8)’s clear directive.

14 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

“disputed” a “specific meaning.” First, § 1692g(b), entitled

“Disputed debts,” provides, in relevant part:

If the consumer notifies the debt collector in writing

within the thirty‐day period described in subsection

(a) that the debt, or any portion thereof, is disputed, …

the debt collector shall cease collection of the debt, or

any disputed portion thereof, until the debt collector

obtains verification of the debt or a copy of a judgment,

… and a copy of such verification or judgment,

… is mailed to the consumer by the debt collector.

15 U.S.C. § 1692g(b).

PRA and ACA argue that the phrase “disputed debt” in

§ 1692e(8) must be interpreted in light of § 1692g(b). They are

incorrect. To the extent that § 1692g(b) defines “disputed,”

that definition applies only to the requirements of that provision

and does not extend to § 1692e(8). See Sayles, 865 F.3d at

250 (“[§1692g(b)’s] debt dispute and verification requirements

do not carry over to [§ 1692e(8)] ….”); Russell, 763 F.3d at 392

(“Nothing in the text of the FDCPA suggests that a debtor’s

ability to state a claim under § 1692e is dependent upon the

debtor first disputing the validity of the debt in accordance

with § 1692g.”); Brady, 160 F.3d at 66 (“Viewing the language

of § 1692e(8) in the context of other provisions of the FDCPA,

it makes logical sense to conclude that the meaning of ‘disputed

debt’ in § 1692g(b) does not carry over to § 1692e(8).”);

see also Hooks v. Forman, Holt, Eliades & Ravin, 717 F.3d 282, 286

(2d Cir. 2013); Purnell v. Arrow Fin. Servs., LLC, 303 F. App’x

297, 304 (6th Cir. 2008).

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 15

This distinction makes sense. Section 1692g(b) “confers on

consumers the ultimate power vis‐à‐vis debt collectors: the

power to demand the cessation of all collection activities.”

Brady, 160 F.3d at 67. In contrast, Ҥ 1692e(8) does not affect

debt collection practices at all,” but instead “merely requires

a debt collector who knows or should know that a given debt

is disputed to disclose its disputed status to persons inquiring

about a consumer’s credit history.” Id. “Given the much more

limited effect of [§ 1692e(8)],” plaintiffs need not adhere to as

many requirements to raise a dispute. Id; see also Hooks, 717

F.3d at 286 (“[T]he rights defined by … [§] 1692e(8) place less

of a burden on debt collectors than the rights defined by

§ 1692g…(b).”).

Moreover, this conclusion is consistent with the language

of § 1692e(8):

If the meaning of “disputed debt” as used in § 1692g(b)

carried over to § 1692e(8), then, in order to trigger the

limited protection of § 1692e(8), a consumer would be

required to submit written notice to a debt collector

within the initial thirty‐day period. But the plain language

of § 1692e(8) requires debt collectors to communicate

the disputed status of a debt if the debt collector

“knows or should know” that the debt is disputed.…

Applying the meaning of “disputed debt” as

used in § 1692g(b) to § 1692e(8) would thus render the

provision’s “knows or should know” language impermissibly

superfluous.

Brady, 160 F.3d at 67 (citations omitted); see also Sayles, 865 F.3d

at 249–50 (same). In short, “had Congress intended for a debt

collector’s liability under the FDCPA to hinge upon a debtor’s

compliance with the validation provisions found in § 1692g,

16 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

… it would have so indicated with conspicuous language to

that effect.” Russell, 763 F.3d at 392.

Second, PRA and ACA point to § 1681s‐2 of the FCRA,

which imposes a similar requirement as § 1692e(8):

If the completeness or accuracy of any information furnished

by any person to any consumer reporting

agency is disputed to such person by a consumer, the

person may not furnish the information to any consumer

reporting agency without notice that such information

is disputed by the consumer.

15 U.S.C. § 1681s‐2(a)(3). However, unlike § 1692e(8), § 1681s‐

2 describes the procedure that one must follow to submit a

dispute. The consumer must “(i) identif[y] the specific information

that is being disputed; (ii) explain[] the basis for the

dispute; and (iii) include[] all supporting documentation required

by the furnisher to substantiate the basis of the dispute.”

Id. § 1681s‐2(a)(8)(D). Moreover, § 1681s‐2 “shall not

apply if the person receiving a notice of a dispute from a consumer

reasonably determines that the dispute is frivolous or

irrelevant.” 15 U.SC. § 1681s‐2(a)(8)(F).

PRA and ACA’s reliance on §1681s‐2 is not persuasive for

the same reasons we may not rely on § 1692g(b): It is a different

provision with different requirements. The FDCPA does

not incorporate § 1681s‐2 or say that its requirements apply to

§ 1692e(8).8

8 In contrast, other FDCPA provisions expressly refer to the FCRA. See,

e.g., 15 U.S.C. § 1692d(3).

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 17

C. Materiality

PRA next contends that even if it technically violated

§ 1692e(8), that violation was “immaterial, and therefore, not

actionable” because its “reporting to the credit bureaus without

a note of ‘disputed’ had zero influence upon plaintiffs.”

Generally, § 1692e only protects against false statements that

are material—in other words, statements that would “influence

a consumer’s decision … to pay a debt.” Muha v. Encore

Receivable Mgmt., Inc., 558 F.3d 623, 628 (7th Cir. 2009). “If a

statement would not mislead the unsophisticated consumer,

it does not violate the FDCPA—even if it is false in some technical

sense.” Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643,

645–46 (7th Cir. 2009). Put another way, “[f]or purposes of

§ 1692e, … a statement isn’t ‘false’ unless it would confuse the

unsophisticated consumer.” Id. at 646.

Critically, however, the Seventh Circuit cases applying the

materiality requirement to § 1692e all involve allegedly misleading

communications made to consumers. In contrast, the

present case involves an allegedly misleading communication

made to credit reporting agencies. While we have not reached

this precise question, the Eighth Circuit has persuasively reasoned

that § 1692e(8)’s command that debtors must “communicate

that a disputed debt is disputed” is “rooted in the

basic fraud law principle that, if a debt collector elects to communicate

‘credit information’ about a consumer, it must not

omit a piece of information that is always material, namely, that

the consumer has disputed a particular debt.” Wilhelm v. Credico,

Inc., 519 F.3d 416, 418 (8th Cir. 2008) (second emphasis

added). We agree with the Eighth Circuit. As the district court

in Gomez explained:

18 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734

Whether or not a consumer is disputing a debt is no

minor matter that could be deemed an immaterial aspect

of the debt. Such a false and misleading statment

[sic] would likely influence a consumer’s decision to

pay a debt … [and] could have had far reaching consequences

for [plaintiff] in her daily life.

2016 WL 3387158, at *4; see also Paz, 2016 WL 6833932, at *5.

Put simply, the failure to inform a credit reporting agency that

the debtor disputed his or her debt will always have influence

on the debtor, as this information will be used to determine

the debtor’s credit score.

D. Bona Fide Error Defense

Finally, PRA argues the bona fide error defense protects it

from liability because it did not “inten[d] to violate the

FDCPA or to ignore a dispute” and did not understand the

Letters as stating “a dispute on the debt balance.” It states that

its “good faith” mistake is “precisely the definition of bona

fide.” PRA is incorrect.

Under the FDCPA,

A debt collector may not be held liable in any action

brought under this subchapter if the debt collector

shows by a preponderance of evidence that the violation

was not intentional and resulted from a bona fide

error notwithstanding the maintenance of procedures

reasonably adapted to avoid any such error.

15 U.S.C.§ 1692k(c). In order to claim this defense, the burden

is on the defendant to show (1) “that the presumed FDCPA

violation was not intentional”; (2) “that the presumed FDCPA

violation resulted from a bona fide error”; and (3) “that it

maintained procedures reasonably adapted to avoid any such

No. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734 19

error.” Kort v. Diversified Collection Servs., Inc., 394 F.3d 530, 537

(7th Cir. 2005). Importantly, a defendant can invoke the bona

fide error defense only if it claims it made an error of fact, not

an error of law. See Jerman v. Carlisle, McNellie, Rini, Kramer &

Ulrich LPA, 559 U.S. 573, 604–05 (2010). Thus, “the bona fide

error defense in § 1692k(c) does not apply to a violation of the

FDCPA resulting from a debt collector’s incorrect interpretation

of the requirements of that statute.” Id.

Here, PRA incorrectly believed the statement “the amount

reported is not accurate” did not constitute a “dispute” under

§ 1692e(8). In other words, it “incorrect[ly] interpret[ed] … the

requirements of [the FDCPA].” See id. This is a mistake of law.

By contrast, a mistake of fact would have occurred if, for example,

PRA lost the Letters before opening them or did not

actually read the language disputing the debt. But PRA concedes

that it received and read the Letters, including the relevant

phrase. Therefore, the district courts were correct that the

bona fide error defense is not available.9

9 Moreover, even if we assume that PRA made an unintentional error

of fact, it still is not entitled to the bona fide error defense because it did

not maintain procedures reasonably adapted to avoid the error. In this

context, “procedures” are “processes that have mechanical or other such

‘regular orderly’ steps to avoid mistakes.” Jerman, 559 U.S. at 587. A “thinly

specified ‘policy,’ allegedly barring some action but saying nothing about

what action to take, is [not] an adequate ‘procedure’ under § 1692k(c).”

Leeb v. Nationwide Credit Corp., 806 F.3d 895, 900 (7th Cir. 2015). While the

evidence demonstrates that PRA provided training sessions and a manual

to employees about recognizing and processing disputes, “[t]here is no

evidence that PRA has measures in place to prevent careless misreading

of letters, such as having employees periodically check one another’s

work, for example.” Flores, 2017 WL 5891032, at *6.

20 Nos. 17‐1773, 17‐1860, 17‐1866, 17‐2622, 17‐2756, 18‐1734



* * *



10 Contrary to appellees’ request, we need not remand to the district

court to determine an award of attorney fees and costs incurred on this

appeal. See Divane v. Krull Elec. Co., 319 F.3d 307, 322 (7th Cir. 2003). Instead,

appellees should follow the commands of Federal Rule of Appellate

Procedure 39. See Fed. R. App. P. 39(d)(1) (“A party who wants costs taxed

must—within 14 days after entry of judgment—file with the circuit clerk,

with proof of service, an itemized and verified bill of costs.”).

For the foregoing reasons, we AFFIRM the judgment of the

district courts.10