In Webster v. Receivables Performance Mgmt., No. 1:18-cv-03940-TWP-DML, 2020 U.S. Dist. LEXIS 128233 (S.D. Ind. July 21, 2020), Judge Walton Pratt found that a debt collector violated the FDCPA by failing to report an account as ‘disputed’ despite the fact that the consumer did not dispute the debt within the 30-day validation period and despite the consumer’s faxing a dispute letter to a stale fax number.  The District Court found that the consumer was not required to dispute the debt within the 30-day validation period.

Drawing a distinction between § 1692g(b) and § 1692e(8), the Seventh Circuit has rejected the argument that disputes under § 1692e(8) must be made within the 30-day period set forth in § 1692g(b) of the FDCPA. The Seventh Circuit explained, [The debt collectors] 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. Appx. 297, 304, 2008 U.S. App. LEXIS 25488 (6th Cir. 2008). Evans, 889 F.3d at 347-48. The Seventh Circuit, quoting the First Circuit, noted that its conclusion was consistent with the language of the FDCPA and § 1692e(8), stating, 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). Evans, 889 F.3d at 348. The Seventh Circuit concluded, “[i]n 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, . . . it would have so indicated with conspicuous language to that effect.” Id. (internal citation and quotation marks omitted). Accordingly, Webster was not required to dispute the debt within the thirty-day time period outlined in § 1692g(b), and her dispute is timely.

The District Court also found that the consumer’s sending of a fax to the debt collector’s stale fax number did not absolve the debt collector of liability.

She argues RPM’s “unilateral decision to ignore faxes sent to a number where it had regularly received faxes in the past . . . and which was posted on several consumer-facing sources, including NMLS … was also unfair and unconscionable, in violation of § 1692f of the FDCPA.” Id. at 9. Lastly, Webster argues that RPM, “by verifying its reporting of the disputed DirecTV debt, and failing to include Ms. Webster’s dispute, engaged in any conduct the natural consequence of which was to harass, oppress, or abuse, in violation of § 1692d of the FDCPA.” Id. Webster asserts RPM has not produced any evidence to show its facsimile system did not receive the dispute letter, and, to the contrary, RPM produced the fax in response to Webster’s discovery request, showing it did in fact receive the faxed dispute letter. Webster argues that RPM does not contest that the September 27, 2018 dispute letter sent to the -3641 fax number was received; rather, RPM simply claims that “it could ignore Ms. Webster’s dispute” because it “unilaterally decided to ignore any notices sent to that fax number.” Id. at 10. Thus, Webster contends, her dispute notice was received and effective, and RPM violated the FDCPA by not reporting the dispute. Thus, summary judgment in her favor is appropriate. RPM contends that Webster has failed to provide any evidence demonstrating that it knew or should have known about Steinkamp’s September 27, 2018 correspondence. RPM explains that it removed the fax number from  its website and informed Webster to use other means to contact it, demonstrating it did not in fact receive or know of Webster’s correspondence. Relying on Irvin v. Nationwide Credit and Collection, Inc., RPM argues a fax confirmation shows, at best, that the dispute letter was received by the fax machine. 2019 U.S. Dist. LEXIS 158167, at *8 (N.D. Ill. 2019). RPM asserts there is no evidence that it used the -3641 fax number or viewed any faxes sent to that number, and, because of this genuine issue of material fact as to RPM’s knowledge of Webster’s debt dispute, Webster’s Motion for Summary Judgment must be denied. RPM has presented evidence that it did not know the information being reported to TransUnion was a false or misleading representation about the disputed debt. However, RPM should have known the information being reported included a disputed debt. Section 1692e(8) provides that a debt collector may not communicate or threaten 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.” 15 U.S.C. § 1692e(8) (emphasis added). Steinkamp sent the dispute letter to RPM via the -3641 fax number. Although RPM intended to discontinue using the fax number,  the number remained listed for RPM on the NMLS and the Better Business Bureau websites. The fax number previously had been used for communications between Steinkamp and RPM’s General Counsel, Mark Case (“Case”), in a case similar to this case (Crutcher v. RPM filed in February 2018). (Filing No. 57-4 at 5-6.) Steinkamp also had communicated with RPM via the fax number numerous times in the previous seven years. (Filing No. 57-5 at 13.) While the fax number had been removed from RPM’s website and other consuming-facing media, the number was not disconnected, and RPM did not inform Webster or her counsel to not use the fax number. (Filing No. 57-4 at 5.) Steinkamp received verification from MetroFax, the fax service his firm was using, that the dispute letter had been received by RPM. (Filing No. 57-5 at 8.) Additionally, on January 9, 2019, Case sent an email to Steinkamp, which read, “[p]lease be advised that RPM removed our inbound fax line on or about January 10, 2018; therefore we did not receive the fax allegedly sent September 20, 2018.” (Filing No. 57-5 at 13.) This email shows Case was advising Steinkamp, at that time, concerning the removed fax line, and this email from Case was sent after the dispute letter had been sent and this lawsuit had been filed. Furthermore, the -3641 fax number was not disconnected or otherwise disabled until February 2019. (Filing No. 57-4 at 8.) The Seventh Circuit concluded in Evans that there had been a violation of the FDCPA under similar circumstances to this case. 889 F.3d at 346. In Evans, each plaintiff defaulted on their credit card account, and Portfolio Recovery Associates (“PRA”) purchased the debts from the original creditors. Id. at 342. More than thirty days after receiving the debt collection letters, the plaintiffs faxed separate letters to PRA that specifically stated, “the amount reported is not accurate.” Id. PRA acknowledged receiving and reviewing the letters but did not consider the letters as disputing the debts, and, therefore, PRA reported each debt to credit reporting agencies without noting that the debts were disputed. Id. at 343. PRA did not interpret the letters as debt disputes because, in addition to the way the letters were worded, the letters were not faxed to the “special disputes department.” Id. The Seventh Circuit held that “[t]his is a clear violation of the statute.” Id. at 346. For these reasons, the Court determines that RPM violated  the FDCPA when it failed to communicate to TransUnion that Webster’s DirecTV debt was disputed because RPM should have known Webster disputed the debt. However, the Court’s inquiry does not stop here, as discussed below, the Court must next determine whether RPM’s bona fide error defense applies.