Michael Bloom v. I.C. System, Inc., a Minnesota Corporation

This case involves a loan between two friends that was erroneously reported to a debt collection agency. In 1985, plaintiff Michael Bloom, an attorney, borrowed $5,000 from his friend, Steven Parker. Bloom used the proceeds from the loan as a venture capital investment in a software company. Parker did not necessarily know or care what the money was being used for.

Parker is an insurance agent and president of Parkwest Insurance Services, Inc., (“Parkwest”). In 1988, Parkwest entered into a contract with defendant I.C. System (“I.C.”) for debt collection services. Unknown to Parker, a Parkwest employee submitted a debt for collection listing Bloom as the debtor. I.C. commenced collection efforts.

Bloom notified Parker of the mistake and Parker made efforts by phone and letter to explain that Bloom’s reported debt was an error. I.C. responded by requesting further written documentation to verify the fact that no debt was owed. Thereafter, I.C. listed the debt as contested.

In May 1989, Bloom filed suit against I.C. alleging unlawful debt collection practices in violation of the Fair Debt Collection Practices Act (“FDCPA”), see 15 U.S.C. §§ 1692e, 1692f, as well as an alternative…