A California district court held that a debt collector was not liable under the FDCPA for targeting a person with the same name as the debtor because the debt collector never made a false statement and the error in targeting the plaintiff was bona fide.
The debt collector in Hedayati v. Perry Law Firm, No. SACV160846DOCDFMX (C.D. Cal. Oct. 27, 2017) attempted to collect a debt owed by one, “Mohammad Hedayati” for unpaid homeowners’ association dues. It targeted the plaintiff “Mohammad Ali Hedayati” mistakenly believing him to be debtor, but who was actually Plaintiff’s brother. Plaintiff sued under Section 1692e of the FDCPA alleging that the attempts to collect the debt from him were false and misleading.
At the conclusion of Plaintiff’s case at trial, and after additional briefing, the court found that the debt collector never falsely represented that Plaintiff owed the debt. It only ever represented that “Mohammad Hedayati” owed the debt—none of its documents list “Mohammad Ali Hedayati” as the debtor.
The court was not persuaded that the dispatching of process servers and mailing debt collection documents to property owned by Plaintiff and to Plaintiff’s place of employment violated the FDCPA. All the documents Plaintiff received listed “Mohammad Hedayati” as the debtor and, importantly, made clear that the debt did not relate to Plaintiff’s property. “Even the least sophisticated debtor knows his own address and can understand that, if he receives debt collection notices that list an address he doesn’t recognize and a name similar to his own, that the debt collector likely has the wrong individual.”
Although the debt collector continued to target Plaintiff even after Plaintiff notified it that he was not the debtor, Plaintiff did not give the debt collector clear notice that it had the wrong person. For instance, he never advised the debt collector that he had a brother named “Mohammad Hedayati” who was the debtor. The debt collector also had attempted on multiple occasions to confirm the debtor’s information. It conducted numerous public records searches, checked the title to various properties, and spoke with Plaintiff’s employee and Plaintiff’s tenant, all of which reinforced the debt collector’s belief that Plaintiff was in fact the debtor.
Even if the debt collector’s action violated the FDCPA, the court found that the bona fide error defense barred Plaintiff’s claims. The error in targeting Plaintiff’s brother was unintentional. While the debt collector acted with volition in its debt collection efforts, its real intention was to contact, and collect the debt from, the actual debtor. Also, the error was bona fide insofar as the debt collector diligently attempted to identify the correct individual by conducting public records searches and following training protocols. Moreover, when the debt collector discovered its error, it ceased collection activity against the Plaintiff and agreed to vacate the judgment. The debt collector’s searches of public records and other databases also shows that it maintained procedures that were reasonably adapted to avoid attempting service on the wrong party. Defendant’s procedures were not able to prevent the error in large part because even public records can’t differentiate between Plaintiff and his brother.