On April 21 the U.S. Supreme Court issued a ruling in favor of debtors who are subject to abuses at the hands of debt collectors.
In Jerman v. Carlisle, the Court ruled that if a debt collector makes an incorrect statement of law during communications with a debtor, in violation of the Fair Debt Collection Practices Act (FDCPA), the debt collector cannot claim they merely misinterpreted the FDCPA in order to shield themselves from a lawsuit. The Court reasoned that ignorance of the law is no excuse when it comes to unfair debt collection tactics.
The case arose when Carlisle, a Cleveland law firm, filed a foreclosure action on behalf of Countrywide against Karen Jerman. However, Jerman had already paid off the mortgage on her home. When Jerman protested, an attorney for Carlisle told her that she must dispute the debt in writing, which is not true. Carlisle admitted the mistake but claimed it should not be liable for legal mistakes. The Court disagreed.
This ruling is a win for debtors who have been subject to abuses by the debt collection industry. The case should result in fewer debt collector misstatements of the law, since they can’t claim those incorrect statements were merely a mistake.