September Webster v. Receivables Performance Manage ( 2022 )


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  •                              In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________________
    No. 21‐1276
    LAURA EWING,
    Plaintiff‐Appellant,
    v.
    MED‐1 SOLUTIONS, LLC,
    Defendant‐Appellee.
    ____________________
    Appeal from the United States District Court for the
    Southern District of Indiana, Indianapolis Division.
    No. 1:18‐cv‐01743‐JRS‐DML — James R. Sweeney II, Judge.
    ____________________
    No. 21‐1299
    SEPTEMBER WEBSTER,
    Plaintiff‐Appellant,
    v.
    RECEIVABLES PERFORMANCE MANAGEMENT, LLC,
    Defendant‐Appellee.
    ____________________
    Appeal from the United States District Court for the
    Southern District of Indiana, Indianapolis Division.
    No. 1:18‐cv‐03940‐TWP‐DML — Tanya Walton Pratt, Chief Judge.
    ____________________
    2                                       Nos. 21‐1276 & 21‐1299
    ARGUED DECEMBER 14, 2021 — DECIDED FEBRUARY 2, 2022
    ____________________
    Before SYKES, Chief Judge, and HAMILTON and ST. EVE, Cir‐
    cuit Judges.
    ST. EVE, Circuit Judge. Laura Ewing and September Web‐
    ster disputed certain debts they allegedly owed to debt‐col‐
    lection companies. Under the Fair Debt Collection Practices
    Act (“FDCPA”), debt‐collection companies must report such
    disputes to credit reporting agencies, see 15 U.S.C. § 1692e(8),
    but the companies here failed to do so. Ewing and Webster
    sued separately, seeking actual and statutory damages. See id.
    § 1692k(a). The companies prevailed at summary judgment
    because the district courts in both cases determined that the
    companies’ mistakes were bona fide errors. See id. § 1692k(c).
    On appeal, both Ewing and Webster argue that the debt
    collectors’ actions were not bona fide errors. We have consol‐
    idated their cases for decision. Before we may reach the mer‐
    its, though, we must reexamine the requirements for Article
    III standing, particularly in light of the Supreme Court’s re‐
    cent decision in TransUnion LLC v. Ramirez, 
    141 S. Ct. 2190
    (2021), which clarified what counts as an injury‐in‐fact.
    I. Background
    A. Ewing v. MED‐1 Solutions, LLC
    Laura Ewing sought to dispute medical debts by faxing a
    letter to MED‐1 Solutions, LLC, a debt‐collection company as‐
    signed to her case. MED‐1’s receptionist, however, misrouted
    the fax, forwarding it to the client‐care department rather
    than the legal department. According to MED‐1’s fax‐distri‐
    bution policy, any faxed legal communication regarding
    Nos. 21‐1276 & 21‐1299                                       3
    contested debts was to be forwarded to the legal department.
    That day the receptionist received five additional dispute let‐
    ters, which she correctly forwarded to the legal department.
    But as a result of the misrouted fax, Ewing’s dispute was
    never recorded.
    Two years later, Ewing obtained her credit report and saw
    that her debts, as reported by MED‐1, were not indicated as
    disputed. After MED‐1 eventually recorded the debts as dis‐
    puted, her credit score rose.
    Ewing sued MED‐1 for violations of the FDCPA. She as‐
    serted that MED‐1 reported her debts to a credit reporting
    agency without noting that the debts were disputed. See 15
    U.S.C. § 1692e(8). MED‐1 admitted that it had received
    Ewing’s dispute letter and failed to report the dispute to the
    credit reporting agency, and it raised the affirmative defense
    of bona fide error under § 1692k(c). This provision provides
    safe harbor for debt collectors when they make an uninten‐
    tional error, so long as they maintained procedures reasona‐
    bly adapted to avoid it. MED‐1 argued that the bona fide error
    defense applied because its failure to report the dispute arose
    from an unintentional error and it maintained procedures rea‐
    sonably adapted to ensure that it reported faxed disputes. Af‐
    ter discovery both parties moved for summary judgment, and
    the district judge entered summary judgment for MED‐1
    based on its affirmative defense.
    B. Webster v. Receivables Performance Management, LLC
    September Webster discovered that her credit report re‐
    flected a debt that she did not believe she owed. She sought
    to dispute that debt, so her attorney faxed a dispute notice to
    the debt collector, Receivables Performance Management,
    4                                      Nos. 21‐1276 & 21‐1299
    LLC. The attorney faxed the notice after verifying that Receiv‐
    ables’s fax number—one he had used on behalf of other cli‐
    ents—remained listed with the Nationwide Multistate Licens‐
    ing System & Registry, the entity responsible for licensing
    debt collectors in Indiana. He received a confirmation that the
    fax was sent successfully.
    Unbeknownst to Webster’s attorney, Receivables had de‐
    cided several months earlier—without announcement—to
    stop monitoring its electronic fax inbox. It stopped checking
    its inbox after removing from its website the fax number Re‐
    ceivables had used to communicate about disputes with debt‐
    ors and their attorneys. Receivables had general policies for
    handling known disputes but no procedure in place to check
    its fax inbox periodically for new disputes or to notify senders
    that the inbox was unmonitored. As a result, Receivables was
    unaware that Webster had faxed any dispute. Because Receiv‐
    ables did not disconnect or disable the fax number, however,
    the line sent confirmations upon receipt of faxes, including
    those sent by Webster’s attorney.
    Webster sued after she obtained an updated credit report
    that reflected her DirecTV debt but not her dispute. She al‐
    leged that Receivables’s failure to communicate her dispute
    harmed her credit reputation and credit score. She submitted
    evidence that her credit score rose once her credit report re‐
    flected her other disputed debts. Receivables countered that
    even if it had violated the FDCPA, its violation was excused
    by the bona fide error defense. See id. § 1692k(c). Both parties
    moved for summary judgment and the district judge granted
    Receivables’s motion based on her assessment that Receiva‐
    bles violated the statute, but its error was bona fide.
    Nos. 21‐1276 & 21‐1299                                                  5
    II. Discussion
    In these appeals, the Debt Collectors1 raise a threshold
    standing argument. They assert that under TransUnion, which
    was decided while these appeals were pending, the Consum‐
    ers lack standing because any risk of future harm they face is
    not sufficiently concrete to support a suit for damages. And
    without a concrete injury, there is no case or controversy for
    us to adjudicate. Carney v. Adams, 
    141 S. Ct. 493
    , 498 (2020).
    A. Standing
    We begin with a few words about the law of standing. Ar‐
    ticle III standing requires the party invoking federal jurisdic‐
    tion to demonstrate that (1) the plaintiff has suffered an in‐
    jury‐in‐fact, (2) the injury was caused by the defendant, and
    (3) the injury is redressable by judicial relief. Lujan v. Defenders
    of Wildlife, 
    504 U.S. 555
    , 560–61 (1992). An injury‐in‐fact must
    be concrete, particularized, and actual or imminent. 
    Id.
     A con‐
    crete injury is essential to standing: “No concrete harm, no
    standing.” TransUnion, 141 S. Ct. at 2200.
    To be concrete, an injury must be “‘real,’ and not ‘ab‐
    stract,’” but concrete need not mean tangible. Spokeo, Inc. v.
    Robins, 
    578 U.S. 330
    , 340–41 (2016). Traditional tangible
    harms, such as physical or monetary harm, easily meet the
    concreteness requirement. TransUnion, 141 S. Ct. at 2204. In‐
    tangible harms can be more difficult to assess. Intangible
    harms are concrete if the plaintiff’s alleged injury bears a
    “close relationship” to the sort of harms traditionally
    1 In nearly all respects, the parties raise materially identical argu‐
    ments. So, for convenience, we refer to them collectively as the Debt Col‐
    lectors (MED‐1 and Receivables) and Consumers (Ewing and Webster).
    We will differentiate between the parties when necessary.
    6                                       Nos. 21‐1276 & 21‐1299
    recognized by American courts, such as reputational harm.
    Spokeo, 578 U.S. at 341. The close‐relationship inquiry looks
    for “a close historical or common‐law analogue” to the al‐
    leged injury but does not require an “exact duplicate.”
    TransUnion, 141 S. Ct. at 2204. When determining if a statuto‐
    rily identified, intangible harm has a close‐but‐not‐exact
    match in American history or at common law, we look to the
    kind of injury the statute protects, not the degree of harm suf‐
    fered. Gadelhak v. AT&T Servs., Inc., 
    950 F.3d 458
    , 462 (7th Cir.
    2020).
    When considering intangible harm, we start from a place
    of respect for Congress’s prerogative to create statutory rights
    and obligations. TransUnion, 141 S. Ct. at 2204. But Congress
    may not make up injuries and decree them to be actionable.
    Id. at 2205. Thus, while Congress may elevate de facto injuries
    that once were thought to be insufficiently injurious to form
    the basis of a federal lawsuit, such an injury must still cause
    real‐world harm in order to confer standing. Id. at 2204–05. In
    this context, then, Congressional authorization to sue is a nec‐
    essary, but not sufficient, condition because one still must be
    “concretely harmed by a defendant’s statutory violation.” Id. at
    2205 (emphasis in original).
    Concrete harms are sometimes difficult to identify, espe‐
    cially when the harm is intangible. For example, in Spokeo the
    Court indicated that, for standing purposes, a material risk of
    harm could be concrete. Spokeo, 578 U.S. at 341–42. The Court
    wrote that, although procedural violations do not automati‐
    cally create concrete injuries, “[t]his does not mean … that the
    risk of real harm cannot satisfy the requirement of concrete‐
    ness.” Id. at 341 (citing Clapper v. Amnesty Int’l USA, 
    568 U.S. 398
     (2013)).
    Nos. 21‐1276 & 21‐1299                                          7
    The Court’s recent decision in TransUnion clarified that a
    risk of future harm is concrete only if the suit is for injunctive
    relief. See TransUnion, 141 S. Ct. at 2210. The plaintiffs in
    TransUnion were a class of individuals whose credit reports
    contained a false notice that the individual was considered a
    potential threat to national security. Id. at 2201–02. They sued
    TransUnion under the Fair Credit Reporting Act (“FCRA”),
    alleging violations of three of the FCRA’s provisions. Id. at
    2200–01; see 15 U.S.C. §§ 1681e(b), 1681g(a)(1), (c)(2).
    The Court divided the plaintiff class into two subgroups
    based on whether the individual’s credit report (with the mis‐
    leading alert) had been disseminated to third parties.
    TransUnion, 141 S. Ct. at 2208–13. It then examined whether
    each subgroup had suffered an injury that bore a close rela‐
    tionship to a traditionally recognized harm. Id. The Court
    held that the plaintiffs whose credit reports had been dissem‐
    inated had standing because the harm caused by the dissem‐
    ination of a credit report with misleading information related
    closely to the reputational harm associated with defamation.
    Id.
    On the other hand, the plaintiffs whose credit reports had
    not been disseminated lacked standing. Id. at 2209–13. The
    Court rejected these plaintiffs’ analogy to defamation because
    they could not prove dissemination, which, in this context,
    was essential to liability. Id. at 2209. Without any disclosure
    to a third party, these plaintiffs could not recover on a close‐
    relationship‐to‐defamation theory because the mere existence
    of inaccurate information did not concretely injure them. Id.
    Nor was the risk of that information being exposed in the
    future a concrete injury. Id. at 2211. The plaintiffs relied on
    Spokeo for the proposition that a material risk of harm can
    8                                         Nos. 21‐1276 & 21‐1299
    satisfy the concrete‐harm requirement; the Court, however,
    distinguished Spokeo on the ground that Spokeo cited Clapper,
    which was a suit for injunctive relief. Id. at 2210. And “a plain‐
    tiff’s standing to seek injunctive relief does not necessarily
    mean that the plaintiff has standing to seek retrospective
    damages.” Id.
    Our pre‐TransUnion case law was shaped by Spokeo’s un‐
    derstanding of concreteness. In Evans v. Portfolio Recovery As‐
    socs., LLC, 
    889 F.3d 337
     (7th Cir. 2018), for instance, we fo‐
    cused on the risk of financial harm posed to a consumer by an
    erroneously low credit score. 
    Id.
     at 344–46. There, as in the
    present appeals, a debt collector failed to report several con‐
    sumers’ disputes of debts that it sought to collect. 
    Id.
     at 342–
    43. The consumers alleged that this omission violated their
    procedural rights under 15 U.S.C. § 1692e(8) and created a
    risk of real harm that was a sufficiently concrete injury under
    Spokeo. Id. at 344–45. We agreed and held that the consumers
    had standing because they alleged a risk of concrete financial
    harm caused by an inaccurately low credit score. Evans, 889
    F.3d at 346.
    TransUnion alters our understanding of Spokeo and super‐
    sedes Evans to the extent Evans says that a mere risk of harm
    is a sufficiently concrete injury to support a suit for damages.
    TransUnion makes clear that a risk of future harm, without
    more, is insufficiently concrete to permit standing to sue for
    damages in federal court. See TransUnion, 141 S. Ct. at 2212–
    13; cf. Lupia v. Medicredit, Inc., 
    8 F.4th 1184
    , 1193 n.3 (10th Cir.
    Nos. 21‐1276 & 21‐1299                                                     9
    2021); Ward v. Nat’l Patient Account Servs. Sols., Inc., 
    9 F.4th 357
    , 361 (6th Cir. 2021).2
    In the wake of TransUnion, then, we ask whether the Con‐
    sumers suffered a concrete injury when the Debt Collectors
    communicated false information (i.e., reports of debts not be‐
    ing disputed) about them to a credit‐reporting agency. The
    Consumers maintain that their injury is concrete because the
    dissemination of false information to a credit reporting
    agency bears a close relationship to reputational harms long
    recognized in American courts and at common law, such as
    defamation.
    The Debt Collectors argue that the Consumers could not
    have suffered a concrete injury because there is no evidence
    that TransUnion sent the Consumers’ credit reports to poten‐
    tial creditors. According to the Debt Collectors, this means the
    Consumers are in the same position as the losing subclass in
    TransUnion. See TransUnion, 141 S. Ct. at 2209. But the argu‐
    ment is a red herring. If the Consumers’ harm is analogous to
    defamation, then they must demonstrate that the Debt Collec‐
    tors disseminated false information about them to a third
    party. The Consumers do not have to make a further showing
    that the third party also shared that false information.
    These appeals also differ from TransUnion in a significant
    regard—different statutes are implicated and the subjects
    whom the applicable statutes aim to regulate are different.
    TransUnion applied the FCRA, which seeks to regulate the
    2 Nevertheless, the outcome of Evans would be the same under this
    decision for the injury the plaintiffs in Evans suffered is indistinguishable
    from the injury the Consumers suffered.
    10                                     Nos. 21‐1276 & 21‐1299
    procedures used by credit reporting agencies. 
    15 U.S.C. § 1681
    (b). The FDCPA, by contrast, aims to prevent abuses com‐
    mitted by debt collectors. See 
    id.
     § 1692(e). Under the FDCPA,
    a consumer must show that a debt collector reported false in‐
    formation, such as by failing to communicate the disputed na‐
    ture of a debt. The Debt Collectors’ comparison between the
    Consumers here and the losing subclass in TransUnion would
    have us hold that the Consumers must show fourth‐party
    publication, which TransUnion does not require.
    Instead, TransUnion requires us to ask whether the injury
    protected by § 1692e(8) bears a close relationship to a harm
    traditionally recognized in American history or at common
    law. See TransUnion, 141 S. Ct. at 2208–09. The statutory vio‐
    lation in these cases is clear—the Debt Collectors failed to re‐
    port a dispute that they should have known about. And Con‐
    gress specifically authorized the Consumers’ claims for re‐
    dress. 15 U.S.C. § 1692e(8). Congress created that claim, along
    with other enumerated claims, to counter abusive debt‐collec‐
    tion practices and to ensure that upstanding debt collectors
    are not at a competitive disadvantage. Id. § 1692(e). But as we
    noted earlier, a statutory violation alone does not make an in‐
    jury concrete. So, we must look for a common law analogue
    to ensure a concrete harm. See TransUnion, 141 S. Ct. at 2204–
    05.
    We believe the harm Congress sought to remedy through
    § 1692e(8) is analogous to the harm caused by defamation,
    which has long common law roots. Following the Court’s ex‐
    ample in TransUnion, we consider the reputational harm that
    occurs when one publishes a false and defamatory communi‐
    cation about another. See TransUnion, 141 S. Ct. at 2209–10;
    Rest. (Second) of Torts § 558.
    Nos. 21‐1276 & 21‐1299                                         11
    In assessing the Consumers’ injury, we focus on the ques‐
    tion of publication because an unpublished statement, even if
    false and defamatory, is not injurious. TransUnion, 141 S. Ct.
    at 2209–10. Specifically, we pause to consider whether the
    Debt Collectors’ communications to TransUnion count as
    publication in light of some dicta in TransUnion. In footnote
    six, the Court acknowledged that the subclass of plaintiffs
    whose credit reports were not disseminated raised a forfeited
    argument that TransUnion had “published” their personal
    and financial information to its own employees and to its
    printing vendors. Id. at 2210 n.6. The Court observed that
    American courts had not “necessarily recognized disclosures
    to printing vendors as actionable publications” and implied
    that, under such circumstances, a plaintiff would need to pre‐
    sent evidence that the defendant had “brought an idea to the
    perception of another.” Id.
    The Consumers have shown publication here through
    their evidence of third‐party dissemination. In this regard,
    they resemble the prevailing subclass in TransUnion, who
    demonstrated that misleading information about them had
    been “disseminated to third parties” and so “suffered a con‐
    crete injury in fact under Article III.” Id. at 2209. The Court in
    TransUnion did not require those plaintiffs to come forward
    with additional evidence of publication because dissemina‐
    tion was clear. See id. at 2209. Here too the Debt Collectors
    disseminated false reports about the Consumers to TransUn‐
    ion. To require more of the Consumers would permit the dicta
    in footnote six to erode TransUnion’s holding that evidence of
    dissemination to a third party is sufficient to show publica‐
    tion.
    12                                      Nos. 21‐1276 & 21‐1299
    Because the Consumers demonstrated third‐party dissem‐
    ination, their appeals do not implicate the Court’s reference
    to a general requirement that defamatory content is read, not
    merely processed. See id. 2210 n.6. In footnote six, the Court
    pointed to a line of cases that dealt with liability for dictating
    defamatory matter to a stenographer. Id. (citing Ostrowe v. Lee,
    
    175 N.E. 505
     (N.Y. 1931)). These cases were concerned with
    whether the stenographer was simply mechanically transmit‐
    ting the words or whether she perceived or understood the
    defamatory significance of what was dictated. See Ostrowe,
    175 N.E. at 505 (publication occurs when defamatory content
    is “read and understood”). Reading was a proxy for under‐
    standing rather than just mechanically transmitting infor‐
    mation, but was not always required. See Rest. (Second) of
    Torts § 577 cmt. h; see also Rickbeil v. Grafton Deaconess Hosp.,
    
    23 N.W.2d 247
    , 252–56 (N.D. 1946) (collecting cases). The es‐
    sential point, one that has always been necessary to prove
    publication, is this: the third party must understand the de‐
    famatory nature of the communication. See Rest. (Second) of
    Torts § 577 cmt. c.
    To determine whether there has been a publication here,
    then, we ask whether TransUnion understood the defamatory
    significance of the Debt Collectors’ reports. We believe that it
    did. TransUnion included the debts in the Consumers’ credit
    reports; TransUnion would have included the disputes too
    had the Debt Collectors communicated them. And the Con‐
    sumers submitted evidence that TransUnion’s assessment of
    their creditworthiness took into account whether a debt was
    disputed or not. That is enough to show that TransUnion un‐
    derstood the significance of the reports.
    Nos. 21‐1276 & 21‐1299                                           13
    The Consumers suffered an intangible, reputational injury
    that is sufficiently concrete for purposes of Article III stand‐
    ing. Specifically, they have shown that their injury is related
    closely to the harm caused by defamation. Reputational harm
    of this sort is a real‐world injury; being portrayed as a dead‐
    beat who does not pay her debts has real‐world conse‐
    quences.
    B. The Bona Fide Error Defense
    We proceed to the merits, and specifically the conclusions
    of both district courts applying the bona fide error defense.
    The district judge in Ewing’s case concluded that, regardless
    of whether MED‐1’s actions violated the FDCPA, its mistake
    was a bona fide error that shielded it from liability. See 15
    U.S.C. § 1692k(c). The judge in Webster’s case determined
    that Receivables’s actions violated the FDCPA but excused
    that violation as a bona fide error. See id. We review those de‐
    cisions de novo with all facts and reasonable inferences
    drawn in favor of the non‐prevailing parties, here the Con‐
    sumers. Hess v. Bd. of Trs. of S. Ill. Univ., 
    839 F.3d 668
    , 673 (7th
    Cir. 2016) (citing Fed. R. Civ. P. 56(a)).
    Under the bona‐fide‐error defense, a debt collector is not
    liable for violating the FDCPA if it shows by a preponderance
    of the evidence that (1) the violation was not intentional, (2)
    the violation resulted from a bona fide error, and (3) it main‐
    tained procedures reasonably adapted to avoid the error.
    Abdollahzadeh v. Mandarich L. Grp., LLP, 
    922 F.3d 810
    , 815 (7th
    Cir. 2019) (citing Kort v. Diversified Collection Servs., Inc., 
    394 F.3d 530
    , 537 (7th Cir. 2005)).
    The Consumers essentially argue that the Debt Collectors
    failed to satisfy the third element—that they maintained
    14                                             Nos. 21‐1276 & 21‐1299
    reasonable procedures to avoid the error.3 The Supreme Court
    has defined “reasonably adapted” procedures “to avoid any
    such error” to mean “mechanical or other such ‘regular or‐
    derly’ steps to avoid mistakes.” Jerman v. Carlisle, McNellie,
    Rini, Kramer & Ulrich LPA, 
    559 U.S. 573
    , 587 (2010). Such steps
    do not require that a debt collector take “every conceivable
    precaution to avoid errors,” only reasonable ones. Kort, 394
    F.3d at 539. This inquiry is fact intensive and “susceptible of
    few broad, generally applicable rules of law.” Abdollahzadeh,
    922 F.3d at 817. Compare id. at 817–18 (debt collector’s “un‐
    questionably simple” procedures reasonably adapted to
    avoid the error of attempting to collect time‐barred debts),
    with Leeb v. Nationwide Credit Corp., 
    806 F.3d 895
    , 900 (7th Cir.
    2015) (debt collector’s “thinly specified ‘policy,’” not reason‐
    ably adapted to avoid sending improper collection letters).
    Juxtaposing the facts of these two appeals illuminates the
    meaning of “reasonably adapted” procedures. In Ewing’s
    case, MED‐1ʹs receptionist accidentally forwarded Ewing’s
    faxed dispute letter to the wrong department. Given the steps
    that MED‐1 had in place to prevent this sort of mistake, the
    judge was correct to conclude that MED‐1 had reasonably
    adapted procedures. The judge looked to MED‐1’s two writ‐
    ten policies that explained, step‐by‐step, how a receptionist
    should properly direct legal faxes. And the judge
    3 Webster alone argues that the judge erred with regard to the first
    element when she concluded that Receivables’s violation was uninten‐
    tional. In her view, Receivables’s decision to stop monitoring its fax inbox
    was intentional. But Receivables needed to show only that its FDCPA vio‐
    lation was unintentional, not that its actions were unintentional. Abdollah‐
    zadeh, 922 F.3d at 815. The judge thus rightly concluded that Receivables
    met the first element.
    Nos. 21‐1276 & 21‐1299                                        15
    appropriately found that these were the kind of “mechanical
    [] steps” that the defense requires. Though a mistake still oc‐
    curred, an errant misdirected fax is just the kind of “occa‐
    sional unintentional misstep” to which the bona fide error de‐
    fense applies. Abdollahzadeh, 922 F.3d at 817. Ewing argues
    that MED‐1 needed to have a policy requiring departments to
    identify and forward misdirected faxes. The absence of such
    a policy, however, does not mean that MED‐1 failed to main‐
    tain reasonably adapted procedures. If MED‐1’s step‐by‐step
    fax procedures had been followed, then the error that gave
    rise to this case would have been avoided. We see no reason
    to disturb the district courtʹs conclusion that those procedures
    were reasonably adapted to prevent it.
    In Webster’s case, however, we disagree with the judgeʹs
    finding that Receivables had reasonable procedures in place
    to prevent its error. Even though its fax number was still listed
    by a national registry, Receivables decided to stop checking
    its electronic fax inbox, without any announcement. And
    when Webster faxed her dispute letter, she received an elec‐
    tronic confirmation that her letter had been received. It was
    not reasonable for Receivables to stop monitoring its fax inbox
    while allowing the system to continue sending confirmations
    that faxes had been received. Unwitting consumers such as
    Webster had no reason to know better.
    The judge, however, glossed over that specific issue. The
    judge asked broadly “whether [Receivables] ha[d] procedures
    in place to avoid incorrectly reporting debts that were dis‐
    puted.” Noting Receivablesʹs general policies that “desig‐
    nat[ed] how to handle disputed debts” and its practice of “up‐
    dating its employees annually on procedure,” the judge con‐
    cluded that Receivables had implemented procedures that
    16                                     Nos. 21‐1276 & 21‐1299
    were sufficiently adapted to avoid the possibility of faxed dis‐
    putes going unreported. But these procedures do not account
    for the likely prospect that debtors would continue faxing dis‐
    putes (at least until they had reason to know better) that Re‐
    ceivables would not report. Receivables needed to have pro‐
    cedures to address the actual error that occurred. See Kort, 394
    F.3d at 537–38 (the bona fide error was narrower than, and led
    to, the FDCPA violation). Like the debt collector in Leeb whose
    “thinly specified ‘policy’” was inadequate because it did not
    address the error that occurred, see Leeb, 806 F.3d at 900, Re‐
    ceivables’s unspecified FDCPA training for employees and
    general policy of reporting disputes does not suffice. For re‐
    gardless of these imprecise policies, Receivables had no rea‐
    sonable procedure in place to ensure that faxed disputes were
    reported. Nor did Receivables implement any reasonable pro‐
    cedure to ensure that it would no longer receive faxed dis‐
    putes in the first place.
    Unlike MED‐1’s one‐time misstep in Ewing, Receivables’s
    lack of procedures invited the error that occurred in this case.
    Until debtors and their attorneys knew that Receivables no
    longer accepted disputes by fax, it was entirely foreseeable
    that Receivables would continue receiving faxed disputes. Re‐
    ceivables used no procedures to avoid the error that occurred,
    let alone reasonable ones, and so is not sheltered by the bona
    fide error defense.
    III. Conclusion
    For the foregoing reasons, in Ewing v. MED‐1, LLC, we
    AFFIRM, and in Webster v. Receivables, LLC, we REVERSE
    AND REMAND.