On January 2, 2024, the CFPB announced through a blog post that it has filed an amicus brief in the U.S. Court of Appeals for the First Circuit to help ensure consumers can hold debt collectors responsible when they make false representations. The CFPB reiterates that it is a violation against Fair Debt Collection Practices Act to tell consumers that they owe a debt or an amount of money that they don’t actually owe, particularly in medical debt collection.
In the case of Carrasquillo v. CICA Collection Agency, Carrasquillo filed for bankruptcy, thus, collection efforts against the person should generally have stopped. However, CICA Collection Agency still sent the person a letter to collect on the debt and said that the consumer could be sued if they didn’t pay it. According to the bankruptcy rules, the consumer couldn’t actually be sued. Carrasquillo filed a lawsuit against the collection agency for the misrepresentation, where CICA pled ignorance.
According to the CFPB’s amicus brief, the debt collector’s argument is wrong. The CFPB further explains that a debt collector can be liable under the Fair Debt Collection Practices Act even if they claim that they did not know that their statement was false. A debt collector will not be held responsible in a lawsuit brought by an individual if they can show that they didn’t intend to make the false representation and that they had effective procedures in place designed to prevent the mistake. However, debt collectors cannot simply claim ignorance.
Read the CFPB’s blog post here.
The Amicus Brief can be found here.