With remarkable factual similarity to our I.B. (name protected for confidentiality) action against Pressler & Pressler, the same Southern District Court (New York) let collection firm Cohen & Slamowitz flush out its bona fide error defense before declaring it liable for seeking payment from the wrong person and while that person was represented by an attorney.
The case is Shapiro v. Cohen & Slamowitz,[1] a 2007 decision warranting analysis to address the specious legal position debt collectors often assert in mistaken-defendant cases. Similar to Pressler's arguments in our recently decided I.B. case, Cohen & Slamowitz argued that its additional collection attempts to the wrong person – despite its actual knowledge that it targeted the wrong person – was either not violative of the FDCPA and/or the result of bona fide error and thus excusable.
In Shapiro, the aggrieved-plaintiff's wife and his attorney notified Cohen & Slamowitz at least four or five times that it targeted the wrong person. The plaintiff was mistaken as the actual debtor, who had a similarly spelled name. The collection letters spelled the name of the actual debtor but were erroneously mailed to the plaintiff. Cohen & Slamowitz acknowledged the mix-up and promised to cease communications but it nevertheless continued to seek payment from the plaintiff.
To escape liability, Cohen & Slamowitz essentially argued that since the plaintiff knew he was not the actual debtor, he was not deceived under the "least sophisticated consumer" standard. The court found that a factual inquiry still existed to ascertain if the "least sophisticated consumer" standard was violated. In contrast, J. Peck in our I.B. case held that, as a matter of law, an additional communication to the wrong party misrepresented the legal status of the debt, and for that, Pressler & Pressler was strictly liable. Even though our client knew he was not the actual debtor, he reasonably believed that Pressler could still enforce a judgment against him. This is a great point. Innocent, unrelated parties suffer bank restraints, wage garnishments, and levies on a fairly regular basis. These people deserve protection under the Fair Debt Collection Practices Act ("FDCPA").
The Shapiro plaintiff also argued that Cohen & Slamowitz violated FDCPA § 1692c(a)(2) that prohibits debt collection communications made directly to consumers who are represented by attorneys. Cohen & Slamowitz argued that since the additional communication was addressed to a different name (even though mailed to the plaintiff's home) it was not a "communication" under the FDCPA and/or the plaintiff was not a "consumer" under the FDCPA. As in our I.B. case, the court found that fact "inconsequential." Both courts correctly cited the FDCPA provision covering those "allegedly obligated to the pay the debt." Both courts also pointed to the FDCPA's legislative history that promulgates the FDCPA's protection to "people who do not owe the money at all" who are pursued because of "mistaken identity or mistaken facts."
Notwithstanding Cohen & Slamowitz's blatant violation(s) of the FDCPA, the Shapiro court denied the plaintiff's motion for judgment on pleadings to enable Cohen & Slamowitz to raise its claim of bona fide error. Upon information and belief, this case has settled.