creditor violated the federal Fair Credit Billing Act ("FCBA"), and
Oregon's Unlawful Debt Collection Practices Act ("UDCPA"), when it
reported a debt as delinquent to credit agencies and continued its
collection activities without first providing an explanation to the debtor
who had contested the debt.
According to the Ninth Circuit: (1) these alleged actions by the creditor
violated the Oregon UDCPA, based on the alleged violation of the FCBA;
(2) the debtor was entitled to actual damages and attorney fees under the
FCBA, regardless of whether the debtor demonstrated detrimental reliance
on the representations made by the creditor; (3) TILA's limitation of a
single recovery for multiple failures to disclose does not necessarily
apply to the FCBA; and (4) the trial court failed to properly apportion
an attorneys fee award as to the debtor's successful claims.
A copy of the opinion is available at:
This case arose from a misunderstanding regarding a $645 charge on the
credit-card bill of the debtor. The creditor allegedly misidentified the
basis for the charge but then allegedly failed to respond to the debtor's
requests for information about it. The creditor allegedly continued to
seek payment and reported the debt as delinquent to credit agencies,
despite the debtor's alleged protest.
In doing so, the Ninth Circuit noted that creditor admittedly violated the
federal Fair Credit Billing Act ("FCBA"). After unsuccessfully attempting
to get a direct response from the creditor, the debtor filed an action in
the District of Oregon, alleging inter alia claims under the FCBA and
Oregon's Unlawful Debt Collection Practices Act ("UDCPA").
The trial court dismissed the UDCPA claim and limited the debtor's total
recovery under the FCBA to $1000. The Ninth Circuit reversed.
According to the Ninth Circuit, if a credit card holder sends a written
notice disputing a charge within sixty days of receiving a bill, FCBA
requires a credit-card issuer to acknowledge the dispute within thirty
days, investigate the matter, and provide a written explanation of its
decision within ninety days. If a creditor fails these requirements, it
is subject to civil liability and forfeiture of the disputed amount.
Similarly, the Ninth Circuit held, the Oregon UDCPA prohibits a debt
collector from "[a]ttempt[ing] to or threaten[ing] to enforce a right or
remedy with knowledge or reason to know that the right or remedy does not
Examining the above statutes, the Court concluded that the trial court
erred in holding that the debtor failed to state a claim under the Oregon
UDCPA. The Court reasoned, that pursuant to the requirements imposed
under the FCBA, the creditor did not have the right to attempt to collect
the disputed charge or to report it to credit agencies as delinquent
without first providing a written explanation. These allegations, the
Court held, also violated the Oregon UDCPA.
The Court also rejected that a detrimental reliance component was required
for the debtor's Oregon UDCPA allegations, reasoning that there was simply
no relevant disclosure or conduct under these circumstances that the
debtor could have relied upon. Thus, the debtor's lack of detrimental
reliance was immaterial to a determination of whether the creditor's
violations resulted in actual damages. Debtors, explained the Court,
cannot rely on unmade explanations. Otherwise, creditors could simply
avoid actual damages under FCBA by never responding to billing disputes.
Next, the Court determined that the creditor's collection actions and
adverse credit reports were not subject to the single-recovery limitation
under 15 U.S.C. 1640(g). Further, the Court also concluded that the
debtor was entitled to all reasonable attorney fees, including those
incurred for the appeal, related to the debtor's FCBA claims.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
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