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Debt Collector Can’t Use Its Own Mistake to Its Advantage, Says Washington Federal Court

Debt Collector Can’t Use Its Own Mistake to Its Advantage, Says Washington Federal Court

By Leslie Bailey, Staff Attorney

As a consumer lawyer, I’ve witnessed some pretty outrageous conduct by corporations, and debt collectors and debt buyers are especially prone to abuses. But even I was surprised at how low one debt collection law firm in Washington stooped lately. 

The case started out in the usual way: the debt collector, the Law Firm of Sam Chandra, sent so-called “dunning” letters to Marie Antonietha Crow notifying her that she owed money on a debt and that the firm sought to collect that money. The trouble was, the debt collector didn’t mail the letter to Marie Crow—it mailed them to Marie Guadalupe Gonzalez. Ms. Gonzalez had never met Ms. Crow, has no connection with her, and, most importantly, did not owe the supposed debt.

The debt collector didn’t stop there. Next, it served Ms. Gonzalez’s employer, a local Albertson’s store, with a wage garnishment order. That order listed Ms. Crow as the debtor—but it referenced Ms. Gonzalez’s own Social Security Number. And within less than a month, hundreds of her hard-earned dollars started to disappear from Ms. Gonzalez’s paychecks. In fact, Ms. Gonzalez’s wages were garnished twenty-one more times over the next year. 

Ms. Gonzalez’s attempts to explain that she was not the debtor fell on deaf ears. She even filed a police report, but nothing changed. Finally, she had no choice but to find a consumer lawyer and sue. Represented by Mike Kinkley and Kirk Miller in Spokane, Ms. Gonzalez sued the Chandra Firm under the Fair Debt Collection Practices Act (FDCPA), a federal law that protects consumers from abusive tactics by debt collectors.

Once the lawsuit was filed, the Chandra firm conceded that Ms. Gonzalez did not owe the debt. But rather than give her back the money it had wrongfully had garnished, the firm filed a motion asking the court to throw Ms. Gonzalez’s case out. The basis? The debt collector argued that, because the debt in question belonged to someone else, Ms. Gonzalez was not a party to the relevant transaction and thus lacked a claim under the FDCPA. In other words, the Chandra firm argued that, because it had messed up and garnished the wrong person’s wages, it should be allowed to skate free.

Nice try. Thankfully, in a succinct, well-reasoned decision, Judge Thomas O. Rice of the U.S. District Court for the Eastern District of Washington denied the motion to dismiss, explaining:                                                                                   

Defendants contend that Plaintiff lacks a viable FDCPA claim because the debt at issue actually belongs to someone else—Marie Antonietha Crow…. This argument is not well-taken. Under the FDCPA, “[t]he term ‘debt’ means any obligation or alleged obligation of a consumer to pay money arising out of a [consumer transaction].”

Defendants “alleged” that Plaintiff owed a debt when they mailed her “dunning” letters and later garnished her wages using her Social Security number to identify her. The fact that the debt actually belonged to someone else does not strip Plaintiff of a cause of action under the FDCPA. These claims may proceed.

Mike Kinkley and Kirk Miller stood up for this consumer. I hope they hold the unscrupulous firm fully accountable, and I hope this decision sends a strong message to debt collectors everywhere that they can’t use their own screw-ups to avoid liability in court for violating the law.