9th Cir. Says No Reliance Required for FCBA Claim; FCBA Allows Multiple Penalties

In Lyon v. Chase Bank USA, N.A., — F.3d —-, 2011 WL 3805641 (9^th Cir. 2011), the Court of Appeals addressed the penalties available under the Fair Credit Billing Act.  The Court of Appeals explained the factual and procedural history as follows:

This case originated with a misunderstanding regarding a $645 charge on the credit-card bill of Appellant Barbee Lyon. Appellee Chase Bank USA, N.A. (“Chase”) misidentified the basis for the charge but failed to respond to Lyon’s requests for informa-tion about it. Chase continued to seek payment and reported the debt as delinquent to credit agencies, despite Lyon’s protest. In doing so, Chase admittedly violated multiple sections of the Fair Credit Billing Act (“FCBA”), 15 U.S.C. §§ 1666–1666j.  ¶  After unsuccessfully attempting to get a direct response from Chase, Lyon and his wife filed this action in the District of Oregon, alleging inter alia claims under the FCBA and Oregon’s Unlawful Debt Collection Practices Act (“UDCPA”), Or.Rev.Stat. §§ 646.639–.643. The trial court dismissed the UD-CPA claim and limited Lyon’s total recovery under the FCBA to $1000.  ¶  We reverse and remand for further proceedings. The trial court erred in holding that Appellants failed to state a claim under the UDCPA. We decline to certify Appellants’ proposed question to the Oregon Supreme Court regarding this claim because existing state precedent guides our decision. As to Lyon’s FCBA claims, the trial court erred in requiring evidence of detrimental reliance to support actual damages and in limiting statutory damages for Chase’s multiple violations of the FCBA to a single recovery. Finally, the trial court abused its discretion in denying any award of attorneys’ fees related to Lyon’s successful claim under the FCBA.

The Court of Appeals ultimately held that under the FCBA, a creditor must provide an explanation of its bill if the consumer requests it.  Until the explanation is given, the creditor can not collect further or furnish adverse information to a CRA.  Since the creditor continued to collect without responding to the consumer, the creditor violated the FCBA and Oregon’s FDCPA — whether or not the unexplained charge actually was owed.  The Court of Appeals also held that the consumer need not demonstrate detrimental reliance to collect actual damages for violation of the FCBA.   The consumer is not limited to a single $1,000 of statutory damages under 15 USC 1640(g) when the creditor commits multiple violations of the FCBA.