Finding that the defendant debt collector was entitled to rely on the information provided by its client about the name of the debtor, a district court judge in Washington state granted summary judgment in favor of Puget Sound Collections, Inc. (PSC) in a Fair Debt Collections Practices Act (FDCPA) case. Angela Campbell v. Puget Sound Collections, Inc., a Washington Corporation d/b/a PSC, Inc., Case No. C21-5429RSM, 2022 U.S. Dist. LEXIS 3684 (W.D. Wash. January 7, 2022).
The case involved PSC’s attempt to collect a medical debt incurred by plaintiff Angela Campbell in connection with a hospital visit during which the plaintiff used her married name (Angela Feldmann), while insured under her maiden name (Angela Campbell). The plaintiff obtained medical services at a Tacoma, WA emergency room on May 29, 2020, using her legal name at the time: Angela Feldmann. At the time, she was insured by Molina HealthCare through Medicaid under her maiden name Angela Campbell and her insurer advised her that she did not owe anything due to her Medicaid coverage. But on October 15, 2020, PCS, on behalf of the hospital, mailed a debt collection letter to her using her married name, Angela Feldmann. The letter sought $1,550.00 in unpaid hospital expenses.
After a six-month period of negotiations between PCS and the plaintiff’s attorney, during which neither the plaintiff nor her attorney advised the insurer about the plaintiff’s name change, the plaintiff brought an action against PCS, alleging violations of both the FDCPA and Washington’s Consumer Protection Act (CPA). PCS filed a motion to dismiss and a motion for summary judgment, arguing that the plaintiff hid information about her name change and the fact that she was covered by Medicaid, and then filed the lawsuit seeking attorney fees and damages many times the original dispute amount of $1,550. In granting the motion, the judge was persuaded by PCS’ argument that but for the plaintiff’s failure to update her insurer of her name change, her inaction after being billed, and her attorney’s decision to not advise PSC of the error, no collection notice would have been sent to the plaintiff: “[While] Plaintiff’s debt should not have been sent to collections[,] … PSC does not appear to have made any error given the information reasonably available to it, rather the erroneous collection was a simple mistake due in part to Plaintiff’s failure to update her insurer of her name change, her inaction after being billed and the apparent subterfuge of her attorney.” Id at 6.
In rejecting the plaintiffs’ FDCPA claim, the court held that “[t]he FDCPA does not impose a duty upon a debt collector to independently investigate the validity of a debt and, unless it is unreasonable to do so, debt collectors have the right to rely upon the information provided by their clients.” Id. (citing Clark v. Cap. Credit & Collection Servs., Inc., 400 F.3d 1162, 1174 (9th Cir. 2006). Finding that the plaintiff presented no evidence that the hospital was unreliable, the court granted PCS’s motion and dismissed all of the plaintiff’s claims with prejudice.
This case provides additional support for the right of debt collectors to rely on information provided by their clients when they have no reason to know that the information is in any way unreliable.