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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.
A collection operation is facing a Fair Debt Collection Practices Act class action lawsuit for not adjusting the post-judgment interest rate after the state of Kentucky changed the maximum rate that could be charged seven years ago, according to a copy of the complaint.
The background: The plaintiff defaulted on a credit card debt back in 2010 that was acquired by a company that was later acquired by the defendant. In 2014, the defendant obtained a judgment on the principal owed on the debt — $4,865.14 — which allowed it to charge 12% post-judgment interest on the unpaid balance.
- This past August, the defendant filed a wage garnishment in state court and served the notice on the plaintiff’s employer. The garnishment notice stated that the balance had grown to $14,174.78 and was continuing to accrue interest at 12% annually.
- The issue is that back in 2017, the state of Kentucky amended the statute establishing the maximum interest rate that could be charged on unsatisfied judgments to 6% annually.
- Taking that into consideration, the actual amount that was owed should be $11,440, according to the complaint.
- The plaintiff claims to have incurred actual damages in the form of loss of use of garnished funds and becoming emotionally upset and embarrassed.
The claims: The complaint accuses the defendant of violating Sections 1692e, 1692e(2)(A), 1692e(5), 1692e(10), 1692f, and 1692f(1) of the FDCPA by attempting to charge post-judgment interest at a rate in excess of what is allowed under Kentucky law.
- The complaint seeks to include anyone else in Kentucky who had a judgment entered against them by the defendant before the statute was changed in 2017 and which the defendant attempted to collect the debt assessing a post-judgment interest rate in excess of 6%.
