Ninth Circuit Reverses District Court, Holds Debt Collector Cannot Simply Rely on Creditor Providing Accurate Information to Invoke Bona Fide Error Defense

The United States Court of Appeals for the Ninth Circuit recently reversed a District Court and held that a debt collector who sends a collection letter seeking an incorrect amount owed cannot use the FDCPA’s bona fide error defense solely because its contract with the creditor required the creditor to provide accurate information.  See Urbina v. Nat’l Bus. Factors Inc., 979 F.3d 758 (9th Cir. 2020).  In the case, the defendant debt collector sought to collect debts owed by plaintiff, using information provided to defendant by plaintiff’s creditor.  Under defendant’s contract with the creditor, the creditor was obligated to provide accurate information.  Upon receiving information on plaintiff’s account, defendant sent a letter to the creditor seeking confirmation of the amount due.  Nonetheless, defendant sent a collection notice to plaintiff before it received a response from the creditor, and the notice misstated the amount owed.  Plaintiff then brought this action, claiming that defendant violated the FDCPA by misstating the amount due.  Although defendant admitted the creditor sent it incorrect payment information and, as a result, defendant misstated the amount due, it claimed that it was protected by the FDCPA’s bona fide error defense, which holds that a debt collector will not be liable “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).  The parties both requested summary judgment, and the trial court granted summary judgment for defendant.

On appeal, the Court reversed. First, it found that “blindly relying on the creditor to send only valid debts[] is not a procedure designed to avoid erroneous interest charges resulting from an inaccurate payment history,” citing the Eleventh Circuit in Owen v. I.C. Sys., Inc., 629 F.3d 1263, 1274–75 (11th Cir. 2011).  Second, the Court found that defendant’s procedure of sending verification requests to creditors, although “closer to the mark [of the bona fide error defense], . . . still falls short” because defendant did not wait for a response from the creditor in this case.  Accordingly, the court reversed the trial court’s decision granting summary judgment to the defendant debt collector.

For a copy of the decision, please contact Michael O’Donnell at, Michael Crowley at, or Andrew Raimondi at