In a recent decision, a federal judge in California denied a debt collector’s motion for summary judgment in an FDCPA case, holding that each instance of reporting a paid debt as “unpaid” to credit bureaus constituted a discrete violation of the statute. The plaintiff alleged that, despite paying utility charges related to an apartment lease, the defendant continued collection efforts and reported the debt as unpaid to all three major credit bureaus from July 2021 through May 2023. The defendant argued that the FDCPA’s one-year statute of limitations barred the claims since the initial collection letter was sent in May 2021; the lawsuit was filed in 2023.

The court disagreed, finding that “each reporting was a discrete act that violated the FDCPA,” and allowed claims based on credit reporting actions on or after August 16, 2022, to proceed. The court also rejected the defendant’s argument that the utility charges did not qualify as consumer debt under the FDCPA, ruling that such charges arising from a residential lease are covered by the statute. The judge found factual disputes as to whether the defendant “knew or should have known” the account was disputed, denying summary judgment on both the FDCPA and California Consumer Credit Reporting Agencies Act (CCRAA) claims.

Finally, the court held that the defendant did not establish a “bona fide error defense” under the CCRAA, as it failed to provide evidence of “reasonable policies and procedures” to prevent the type of violation alleged.