CONCLUSION
For the reasons set forth above, defendants’ motion for summary judgment is granted as
to Count I (Illinois Interest Act) and denied as to Count !1(FDCPA). Plaintiff's motion for
summary judgment on Count II is granted. Because this case was filed as a class action, plaintiff
is directed to inform the court of her intention to pursue class relief on Count TI. This matter is

set for a report on status on March 8, 2005, at 9:00 a.m..

ENTER: February 25, 2005

Robert W. Gettleman
United States District Judge


Rate was 4%. The calculation of the minimal Delinquency APR results in 20.75%, triggering the
minimal Delinquency APR of 25%. Therefore, defendants were not authorized by the contract to
charge 25.5%, and their attempts to do so violated the FDCPA. See 15 U.S.C. § 1692f(1).

Defendants also argue that even if they overcharged, it was the result of a bona fide error.
Section 1692k(c) provides that a “debt collector may not be held liable in any action brought
under this subchapter if the debt collector shows by a preponderance of evidence that the
violation was not intentional and resulted from a bona fide error not withstanding the
maintenance of procedures reasonable adopted to avoid any such error.”

The statute places the burden squarely on defendants to establish that the violation was
both unintentional and resulted from a bona fide error notwithstanding the maintenance of
procedures reasonably calculated to avoid such errors. Defendants have presented no evidence of
any procedures at all, let alone any procedures reasonably calculated to avoid the type of error
presented. Indeed, defendants concede that they did not possess the Terms and Conditions of
plaintiffs account until after this suit was filed, and even if they had that document it would have
clearly indicated that the default interest rate could be no more that 25%. Blind reliance on a
contrary representation from the originating creditor cannot qualify as a bona fide error. Even in
Jenkins v. Heintz, 124 F.3d 824,834 (7" Cir. 1997), the case upon which defendants’ rely, the
court noted that the defendants had “offered unrebutted evidence of the procedures they followed
when preparing to file suit to collect a debt to avoid errors and omissions that could result in an
FDCPA violation.” Because no such evidence was presented in the instant case, defendants have
failed to present a question of fact as to the applicability of the bona fide error defense.

Accordingly, the court grants plaintiff's motion for summary judgment on Count II.


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
TAMARA DURYGINA, )
)
Plaintiff, )
) No. 04 C 1963

v. )

) Judge Robert W. Gettleman
FIRST RESOLUTION MANAGEMENT )
CORPORATION and FIRST RESOLUTION )
INVESTMENT CORPORATION, )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Tamara Durygina has brought a two count amended putative class action
complaint against defendants First Resolution Management Corporation (“FRMC”) and First
Resolution Investment Corporation (“FRIC”) alleging violations of the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). Defendants have moved for summary
judgment on both counts and plaintiff has filed a cross motion for summary judgment on Count
IL. For the reasons set forth below, defendants’ motion for summary judgment is granted as to
Count I and denied as to Count II. Plaintiff's motion for summary judgment on Count II is
granted.

FACTS

Plaintiff was issued an AspireVisa credit card through CompuCredit Corp. The creditor
was Columbus Bank and Trust Company of Columbus, Georgia, a Georgia state chartered bank.
Defendant defaulted on the account, resulting in accrual of interest. The defaulted debt was

purchased by a series of debt purchasers ending with FRIC. Plaintiff alleges that the Mlinois


Interest Act, 815 ILCS 205/1 et seq. limits the maximum amount of interest chargeable to
plaintiff's account to 9%. Defendant FRMC, on behalf of FRIC, has attempted to collect interest
at the rate of 25.5%.

DISCUSSION

Count 1: Illinois Interest Act

In Count I, plaintiff asserts that defendants’ attempts to collect interest at greater than 9% violates
the Illinois Interest Act (“IIA”), and thus amounts to a violation of the FDCPA. In essence,
plaintiff argues that the assignee of a debt can be prohibited by the IIA from charging the full
interest on the debt if the assignee could not have contracted for the same interest rate as an
original creditor. Because defendants are not licenced by the Illinois Department of Financial
Institutions, they could not have contracted for a rate higher than that prescribed by the IIA.
Plaintiff has pointed the court to no case law adopting this argument. Indeed, it has been
rejected by at least two judges in this district. For example, Judge Moran has held that the “ITA
regulates only the origination of loans and not the assignment of rights. To hold otherwise would
allow a debtor to receive a better interest rate than was bargained for, simply because his account
was assigned to an unlicenced entity. As long as defendants charged an interest rate that was less

than or equal to the amount originally contracted for, plaintiff's claim must fail.” Vickey v.

Asset Acceptance, LLC, 2004 WL 1510026 at *2 (N.D. Ill. 2004). Judge Moran relied on Olvera
v. Blitt & Gaines, 2004 WL 887372 (N.D. Ill. 2004), in which Judge Kennelly, after thoroughly
reviewing the statutes involved, held that the IIA regulates the origination of loans and credit
agreements by lenders and creditors, but “does not deal with the interest an assignee who was not

an original party to the credit agreement can charge on a matured debt.” Id. at *4.


Plaintiff has presented nothing to suggest that the reasoning in Vickey and Olvera is in
any way faulty. This court agrees with that reasoning and concludes that the ITA is inapplicable
to the instant case. Accordingly, defendants’ motion for summary judgment on Count | is
granted.

Count Ii: FDCPA

In Count Il, plaintiff alleges that defendants have violated the FDCPA by charging 25.5%
interest, a rate higher than authorized by the original credit card agreement. Defendants argue
that the credit agreement sets forth a fixed default rate of 25.5% and, even if it does not, any
overcharge was the result of a bona fide error and thus not actionable under the FDCPA. See 15
USS.C. § 1692k(c). Defendant is wrong on both accounts.

First, despite defendants’ repeated representations, the contract in question contains no
provision setting a fixed default interest rate. Defendants cannot create such a provision by
submitting an affidavit from someone from Aspire (the originating creditor) who has interpreted
the contract as so providing. Neither defendants nor their affiants point to any provision in the
contract setting a fixed rate, because the contract clearly indicates that the delinquency rate is
variable.

The Delinquency Monthly Period Rate applied in any billing cycle will be equal to

1/12 of the total of (a) the Prime Rate and (aa) the Delinquency Margin shown on

the accompanying Summary of Terms.

The accompanying Summary of Terms indicates that the delinquency APR may vary but
in no event will be less than 25%. The Delinquency Margin is set at 16.75%.

In the instant case, it is undisputed that as of August 11, 2003, when defendants first sent

a collection letter to plaintiff, and December 1, 2003, when the second letter was sent, the Prime