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Dreher Tomkies LLP
Attorneys at Law
2750 Huntington Center
41 South High Street
Columbus, Ohio 43215
Telephone: 614-628-8000
Fax: 614-628-1600

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On May 4, 2007, the United States District Court for the Central District of California ordered Arrow Financial Services, LLC to pay $100,000 in damages after a jury found Arrow liable for violating the federal Fair Debt Collection Practices Act. No. CV 06-1568-RGK (PLAx) (C.D. Cal. May 4, 2007). Arrow is a debt collection agency that performs collection services for creditors. The plaintiff claimed that Arrow violated, among other things, Sections 1692d and 1692e(8) of the FDCPA by reporting an account to credit reporting agencies after Arrow received a written notice from the plaintiff disputing the account. Presumably, Arrow did not note the dispute when reporting the account. Section 1692d prohibits debt collectors from engaging in conduct the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt while Section 1692e(8) prohibits debt collectors from communicating or threatening 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. The $100,000 jury award reportedly was made up of $85,000 in damages for emotional distress and mental anguish and a $15,000 penalty for repeat violations of the FDCPA.

Practice Tip: Written notice of dispute is not required. Arrow could have been found liable under the FDCPA even if the plaintiff had only orally notified Arrow of the dispute because at least one court has held that a consumer need not dispute a debt in writing in order to be afforded the protections under Section 1692e(8). Brady v. The Credit Recovery Company, Inc., 160. F.3d 64 (1st Cir. 1998). Representatives need to be carefully trained to recognize and address consumer disputes.

  • Mike Tomkies and Charles Gall