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Walton v. Cca

United States Court of Appeals, Seventh Circuit

March 21, 2018

Deborah Walton, Plaintiff-Appellant,
EOS CCA, Defendant-Appellee.

          Argued February 27, 2018

          Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:15-cv-00822-TWP-DML - Tanya Walton Pratt, Judge.

          Before Wood, Chief Judge, and Bauer and Barrett, Circuit Judges.

          Barrett, Circuit Judge.

         Deborah Walton sued EOS CCA, a debt collector, under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. Walton argues that EOS violated the former by failing to contact the creditor directly to "obtain[] verification" of her debt and the latter by failing to investigate disputed information. The district court concluded that EOS had discharged its obligation under both statutes and entered summary judgment for EOS. We affirm the district court's judgment.


         In a letter dated October 11, 2014, AT&T notified Deborah Walton that she owed $268.47 on her closed AT&T account. It identified her account number as 119864170 and informed her that failure to pay the bill "may cause your account to be referred to an outside collection agency." Walton did not pay the bill, and on January 27, 2015, she received a debt-collection letter from EOS CCA ("EOS"). The notice stated that she owed AT&T $268.47 and that payment was expected "unless [she] dispute[d] the debt." Because of an error in the records AT&T sent EOS, the letter incorrectly identified Walton's AT&T account number as "864119170" when her actual account number is 119864170. AT&T had swapped the first three digits of Walton's account with the second three in the information it provided to EOS.

         Walton contacted EOS to dispute that the debt belonged to her. During a phone call with an EOS representative, Walton acknowledged that her name and mailing address in the debt notice were correct, but she falsely denied that the last four digits of her social security number matched those the representative gave her in an attempt to confirm her identity. Walton also wrote EOS a letter disputing the debt, in which she asserted: "I do not own [sic] AT&T any money under the account number listed above." After investigating, EOS sent Walton a notice it characterized as "verification of your outstanding debt." It told Walton that based on "a review of our records, " it had verified that her name, address, and the last four digits of her social security number matched the debt report it had received from AT&T. The verification letter also provided additional information about the amount of the debt: it stated a balance of $268.47 and specified that AT&T had not added interest or collection costs to the account. As it had in its initial notice to Walton, EOS listed her AT&T account number with the three swapped digits reflected in the records AT&T had sent it.

         EOS reported Walton's debt to two credit-reporting agencies, Experian and TransUnion. When it did so, it informed the agencies that the account was disputed. Walton wrote to Experian and TransUnion to dispute the debt, once in April and again in May. Each time, the agencies sent EOS a notice reflecting the complaint that Walton had registered. The first notice stated that Walton had insisted that the debt did not belong to her. This notice prompted EOS to double-check its own records, and it again concluded that Walton's name, address, and social security number matched the information it had received from AT&T. The second notice stated that Walton had asserted that EOS's debt-collection letter referred to account 864119170, when her correct account number was 119864170. After receiving this second notice, EOS asked Ex-perian and TransUnion to delete Walton's debt record.

         Walton sued EOS, claiming that it violated (1) the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. (2006), by not verifying her debt with the creditor, AT&T, and (2) the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. (2010), by not reasonably investigating the disputed information. She alleges that she lost income, suffered emotional distress, and incurred substantial attorney's fees as a result of these violations. A magistrate judge recommended that the district court enter summary judgment in favor of EOS, and the district court, overruling Walton's objections to the magistrate's report and recommendation, did so.


         We begin with the FDCPA. Under that Act, if a consumer "notifies the debt collector in writing within the thirty-day period" that the consumer is disputing a debt notice, "the debt collector shall cease collection of the debt … until the debt collector obtains verification of the debt … and a copy of such verification or judgment … is mailed to the consumer by the debt collector." 15 U.S.C. § 1692g(b). The statute does not describe what it means to "obtain[] verification of the debt, " and the definition of "verification" does not cast much light on the problem before us. "Verification" is "the authentication of truth or accuracy by such means as facts, statements, citations, measurements, or attendant circumstances." Webster's Third New International Dictionary 2543 (1961). The question here, however, is what the debt collector is supposed to be verifying. Walton argues that § 1692(g) is about the accuracy of the underlying debt; she insists that the provision obligated EOS to contact AT&T to confirm whether the account number was hers and thus whether she really owed AT&T the money. EOS maintains that § 1692(g) is about the accuracy of its collection notice; it argues that the provision required EOS to confirm only that its notice to Walton matched AT&T's description of the debt and debtor.

         EOS is right. The Act's stated purpose is "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). It is both sensible and consistent with that purpose to construe § 1692g(b) as requiring a debt collector to verify that its letters to the consumer accurately convey the information received from the creditor. The verification assures the consumer that the creditor actually made the demand the debt collector said it did and equips the consumer to evaluate the validity of the creditor's claim. It would be both burdensome and significantly beyond the Act's purpose to interpret § 1692g(b) as requiring a debt collector to undertake an investigation into whether the creditor is actually entitled to the money it seeks. Section 1692g(b) serves as a check on the debt-collection agency, not the creditor. We thus join other circuits in holding that the statute requires "nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed." Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999); Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1173-74 (9th Cir. 2006).

         With this in mind, EOS plainly satisfied § 1692g(b). It checked its records and confirmed that the Deborah Walton to whom it had sent a debt-collection letter was the same Deborah Walton identified by AT&T. It then mailed Walton a notice confirming that it had sent the demand for payment to the person AT&T identified and for the amount AT&T sought. The notice included AT&T's address, which served both to identify and provide contact information for the creditor. This verification armed Walton with the information she needed to "sufficiently dispute the payment obligation." Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997, 1004 (8th Cir. 2011); see also Haddad v. Alexander, Zelmanski, Danner & Fio-ritto, PLLC, 758 F.3d 777, 784 (6th Cir. 2014). Indeed, that is precisely what Walton did. She used the data she received from EOS-in particular, the erroneous ...

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