Alabama Court Rejects I.C. System’s Bona Fide Error Defense in FDCPA Case
Case Snapshot
- Court: U.S. District Court, Northern District of Alabama
- Case: Little v. I.C. System Inc., No. 2:24-cv-1636-ACA
- Decision Date: Oct. 6, 2026
- Core Issue: FDCPA dispute reporting and bona fide error defense
- Key Allegation: Failure to report a consumer’s debt as disputed under Section 1692e(8)
- Court Holding: A reasonable jury could find the collector’s procedures insufficient to establish its bona fide error defense.
- Outcome: Renewed motion for judgment as a matter of law denied; jury verdict remains intact.
- Notable Detail: The account-matching policy failed to recognize a consumer who commonly used his middle name.
A federal judge in Alabama has denied I.C. System Inc.’s attempt to overturn a jury verdict finding the debt collector violated the Fair Debt Collection Practices Act (FDCPA) by failing to report a consumer’s debt as disputed.
In an Oct. 6 memorandum opinion and order, U.S. District Judge Annemarie Carney Axon found that a reasonable jury could determine the company’s account-matching procedures were insufficient to support its bona fide error defense.
Account-Matching Policy at Center of Dispute
The case arose after consumer David Scott Little sent I.C. System a letter disputing a debt. Although the letter included his full legal name, date of birth, partial Social Security number, address and contact information, the collector failed to locate his account.
I.C. System’s policy required specific combinations of a consumer’s first and last name with other identifying information. Because Little’s account was listed under his commonly used middle name, Scott, the system failed to identify the account or report the debt as disputed.
The company subsequently sent a letter requesting additional information, which Little testified he never received.
Following a jury verdict in Little’s favor, I.C. System sought judgment as a matter of law, arguing that its procedures qualified for the FDCPA’s bona fide error defense under Section 1692k(c).
Court Finds Jury Could Reject Collector’s Defense
The court determined that a reasonable jury could find I.C. System’s procedures were not reasonably adapted to prevent the reporting violation.
The judge emphasized that the collector possessed multiple identifying details but restricted its searches to three combinations that did not account for consumers using middle names or alternative first names.
The court also found that I.C. System had not demonstrated how its follow-up correspondence procedures adequately prevented disputed accounts from being reported without the required notation.
Implications for Debt Collection Agencies
The decision highlights the importance of maintaining account-matching and dispute-handling procedures capable of identifying consumers whose names differ across records.
For collection agencies, the ruling reinforces that maintaining written compliance procedures does not automatically establish a bona fide error defense. Courts may examine whether those procedures are reasonably adapted to prevent the specific statutory violation.
The court denied I.C. System’s renewed motion for judgment as a matter of law, leaving the jury verdict intact.
