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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.
Consolidation has been a trend in the ARM industry for some time, and this lawsuit could serve as a cautionary tale to anyone making an acquisition in this space. A collector is facing a Fair Debt Collection Practices Act lawsuit for communicating with an individual who was represented by an attorney because the collector allegedly sent a letter to the plaintiff who had informed a previous collection operation — that was subsequently acquired by the defendant — of the representation. The suit also includes a Hunstein claim and an overshadowing claim for good measure.
The Background: The plaintiff received a letter from a collection operation in February 2023. The plaintiff subsequently hired an attorney to represent him and the attorneys notified the collection operation and the creditor that all further communications should be sent to them, according to the complaint.
- The collection operation was then acquired by the defendant.
- In August 2023, the defendant sent the plaintiff a collection letter. The letter was not sent to the plaintiff’s attorneys. The letter informed the plaintiff that the account was no longer being serviced by the original collector and was now being serviced by the defendant.
- The defendant also allegedly used a third-party service provider to print and mail the letter on its behalf to the plaintiff. The defendant conveyed the plaintiff’s personal and private information to the service provider without the plaintiff’s permission to do so.
- The August letter informed the plaintiff that he had until October 8 to dispute all or part of the debt. The complaint claims the August letter was not mailed in August and the defendant did not provide the plaintiff with the full 30 days to dispute all or part of the debt or seek verification.
The Claims: The complaint accuses the defendant of violating Sections 1692c(b) and 1692f of the FDCPA by communicating information about the debt with a third party and disclosing information about the plaintiff’s debt to the third party without the plaintiff’s permission.
- The complaint also accuses the defendant of violating Sections 1692g(a) and 1692g(b) of the FDCPA by not providing the plaintiff with 30 days to dispute the debt and overshadowing the plaintiff’s rights.
- The complaint also accuses the defendant of violating Sections 1692c(a)(2) and 1692c(c) of the FDCPA by communicating with the consumer when it knew that the consumer was represented by an attorney who did not consent to the plaintiff being contacted directly.
