Collector - July 2018 - 31
The Seventh Circuit clarifies
how debt collectors are
expected to investigate
consumer disputes under
the FDCPA and FCRA.
By David N. Anthony, Jonathan P. Floyd
and Stephen D. Lozier
he U.S. Court of Appeals
for the Seventh Circuit
recently affirmed a lower
court decision finding a debt
collector's verification and
investigation of a consumer's
disputes through its review of
records obtained from the creditor was both
satisfactory under the Fair Debt Collection
Practices Act and reasonable under the Fair
Credit Reporting Act. The case, Deborah
Walton v. EOS CCA, No. 17-3040 (7th
Cir. Mar. 21, 2018), could have significant
implications for debt collectors-though
not every circuit agrees with it.
EXPLORING THE FACTUAL AND
Originally filed in the Southern District
of Indiana in 2015, this matter arose out
of a debt plaintiff Deborah Walton owed
to AT&T. After notifying Walton of her
delinquency, AT&T assigned or sold the
debt to EOS CCA for collection. However,
the records AT&T transferred to EOS
contained the wrong account number for
EOS subsequently mailed Walton a
collection letter in an attempt to collect
the debt. Walton recognized the inaccurate
account number and disputed the debt
with EOS over the phone and by letter.
EOS confirmed the account information
through a review of the records it received
from AT&T and sent Walton a letter that
verified the information included in its debt
collection letter was accurate.
Walton alleged EOS's review of the
account documents without specifically
verifying the underlying debt with AT&T
was a violation of the FDCPA.
Following Walton's dispute, EOS reported
Walton's debt to credit reporting agencies
with a notation that the debt was disputed.
Walton then disputed EOS's reporting of the
debt with these credit reporting agencies.
The reports generated by the credit reporting
agencies for EOS stated that Walton claimed