EDITOR’S NOTE: This article is part of a series that is sponsored by WebRecon. WebRecon identifies serial plaintiffs lurking in your database BEFORE you contact them and expose yourself to a likely lawsuit. Protect your company from as many as one in three new consumer lawsuits by scrubbing your consumers through WebRecon first. Want to learn more? Call (855) WEB-RECON or email admin@webrecon.net today! Thanks to WebRecon for sponsoring this series.
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.
We’ve all seen cases where a consumer files a lawsuit against a company in the credit and collection industry and the company then seeks to invoke the arbitration clause that was included in the original agreement between the consumer and the creditor. But what you don’t see everyday is the flipside of that — a consumer filing a lawsuit because he was not allowed to invoke an arbitration clause after he was sued by a company for not paying a debt.
The background: The defendant purchased the debt in question and hired a law firm to collect on it. The law firm filed a collection lawsuit in state court. After receiving the summons and complaint, the consumer sent a formal demand for arbitration to both the debt buyer and the law firm. The consumer requested that the case be moved from the state court to an arbitration forum as per the agreement’s stipulations.
- The defendants failed to respond to or acknowledge the arbitration demand, proceeding with the collection lawsuit, according to the complaint.
- The plaintiff then filed this lawsuit, claiming that the defendants violated the arbitration agreement by not dismissing the state court lawsuit and failing to initiate the arbitration process as required by the contract.
- The complaint does not detail the outcome or the status of the collection lawsuit.
The claims: The plaintiff asserts several violations under the Fair Debt Collection Practices Act, specifically Sections 1692e(2)(A), 1692e(5), 1692e(10), 1692f, and 1692f(1).
- The plaintiff claims the defendants’ actions caused him to suffer financial hard by bearing the costs of litigation, emotional distress, including anxiety, frustration, fear, and a sense of oppression due to the defendants’ refusal to honor his arbitration rights.
