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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.
I will say at the outset that this is one of those “I’m not a lawyer cases” so maybe this is an interesting claim or maybe it’s not, but it’s one I haven’t seen before so I am throwing it out there. A consumer in Kentucky is attempting to use the arbitration provision of the underlying agreement between herself and the original creditor as evidence that the defendant violated the Fair Debt Collection Practices Act and state law by filing a collection lawsuit against her. She has filed a class-action complaint against the defendant.
The background: The plaintiff signed up for a credit card. The cardholder agreement had an arbitration provision that stated any “controversies of disputes between us will be resolved by a neutral arbitrator instead of a judge or jury.” The provision had one exception, which stated that claims are not subject to arbitration “if they are filed by you or us in a small claims court.”
- The plaintiff defaulted on the credit card debt and it was sold to the defendant.
- The defendant filed a collection lawsuit in Kentucky state court — not small claims court — against the plaintiff seeking to recover the unpaid debt.
- Filing such a lawsuit outside of small claims court violates the cardholder agreement’s mandatory arbitration provision, the plaintiff alleges.
- Having to hire legal counsel to defend herself against the collection lawsuit, as well as the loss of time that the plaintiff has had to invest in defending against the suit caused the plaintiff to suffer actual damages, she claims in the complaint.
The claims: The suit accuses the defendant of violating Sections 1692e, 1692e(2)(A), 1692e(5), 1692e(10), and 1692f of the FDCPA as well as provisions of the Kentucky Consumer Protection Act.
- She seeks to include anyone else from Kentucky who was sued by the defendant for an unpaid debt where the underlying agreement had an arbitration clause that was the same or essentially the same as the one between the original creditor and the plaintiff in this case.
