The Utah Court of Appeals has affirmed a lower court’s ruling in favor of a debt buyer that was sued by a group of plaintiffs that alleged the debt buyer’s attempts to collect debts while unlicensed under the Utah Collection Agency Act (UCAA) constituted deceptive and unconscionable acts under the Utah Consumer Sales Practices Act (UCSPA), saying that the debt buyer didn’t intentionally mislead the plaintiffs with its actions.
A copy of the ruling in the case of Fell et al. v. Alco Capital Group can be accessed by clicking here.
The defendant, through local legal counsel, filed collection lawsuits against the plaintiffs to collect on unpaid debts. The defendant obtained judgments against the plaintiffs and sought to enforce those judgments via garnishment proceedings.
The plaintiffs filed suit, alleging the defendant violated the UCSPA because it did not have a license under the UCAA, which is required before pursuing any collection effort in Utah — the collection lawsuits, claimed the plaintiffs. While the state court judge conceded that the defendant violated the UCAA by not having a license, there is no private right of action under that statute and a violation of the UCAA was not enough to constitute a violation of the UCSPA.
In order to be considered deceptive or unconscionable, the defendant’s actions had to rise to the level where it concealed its status with knowledge or intent to deceive, and the plaintiffs ultimately can’t prove that to be the case, the Appeals Court ruled.
“Even though Alco was not in compliance with the UCAA’s licensing requirements, its pursuit of otherwise appropriate collection actions does not obviously qualify as an unconscionable practice under the UCSPA,” the Appeals Court ruled. “As noted, Appellants bear the burden of persuasion on appeal, and they have not persuaded us that Alco’s mere lack of licensure renders its otherwise lawful collection efforts an unconscionable practice under the UCSPA.”
