Home Home Collection Industry News U.S. Supreme Court Rules Against Debt Collector in FDCPA Case
U.S. Supreme Court Rules Against Debt Collector in FDCPA Case
Thursday, 22 April 2010 19:29
With straightforward majority reasoning of "ignorance of the law is no excuse" and a dissent that included fears of plaintiffs' attorneys run amok, the ruling has something for everyone. But an ARM legal expert notes that the impact will be immediate and burdensome for collection lawyers.
by Patrick Lunsford
insideARM
April 22, 2010

The United States Supreme Court Wednesday handed down a ruling that severely complicates the bona fide error defense under the FDCPA for ARM companies involved in litigation.

In a 7-2 ruling, the Court said that collection law firms could not use misinterpretations of the law in a bona fide error defense under the Fair Debt Collection Practices Act (FDCPA).

In the case -- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich -- the plaintiff sued the defendant ARM firm for violating the FDCPA when it attempted to foreclosure on her home. The Ohio firm required that Jerman prove in writing within 30 days that she had paid her Countrywide Home Loans mortgage; otherwise the debt would be assumed valid.  Jerman hired a lawyer to meet the Ohio firm’s written requirement, but FDCPA law does not require consumers to challenge debt claims in writing.

 

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