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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
The relationship between a collection operation and the creditor to whom the debt is owed can be tricky and sometimes, the transition of accounts between the two is not always seamless. A plaintiff has filed suit against both a collection agency and the creditor, accusing them of violating the Fair Debt Collection Practices Act and the state law in Florida by refusing to honor an agreement set up by the plaintiff’s debt settlement representative and the collection agency.
The Background: Last June, the plaintiff’s debt settlement representative and the collection agency agreed to settle the debt and close the account with the creditor. The plaintiff would have to make three payments totaling $4,658. The agency was sent the plaintiff’s banking information and a preauthorization to make the three withdrawals.
- The first payment cleared without any issue.
- On October 24, the agency advised that the account had been recalled by the creditor. That same day, the debt settlement representative contacted the creditor and requested the settlement agreement be honored, but the creditor advised they did not have the account — it was still with the agency.
- Between November 9 and 13, the agency continued to deny it had the account while the creditor insisted it was still placed with the agency.
- On December 4, the creditor confirmed it had recalled the account, but said it was refusing to honor the agreement and demanded it be renegotiated.
- On January 10, the plaintiff’s attorney sent a letter to the creditor and the agency outlining the facts and circumstances and requested a discussion. The defendants have not responded to the letter, according to the complaint.
The Claims: The suit accuses the defendants of violating several provisions of the Florida Consumer Collection Practices Act by demanding the settlement be renegotiated and for failing to honor a valid agreement.
- The complaint also accuses the defendants of violating Section 1692e(10) of the FDCPA by deceptively entering into an agreement which the agency never intended to abide by and for failing to accept the remaining payments, according to the complaint.
