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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.
Debt parking is not a common claim made in lawsuits against collection operations these days. It’s so rare that I feel like I need to explain it because there are likely people in the industry who have never heard the term. A collection operation is facing a class-action lawsuit in Pennsylvania state court for allegedly violating Regulation F and the Fair Debt Collection Practices Act by reporting information about a consumer’s debt to the credit reporting agencies without first providing notification to the consumer about the debt.Making this complaint slightly less interesting is the absolute dearth of details about what happened.
The background: The long-and-short of the complaint is that the plaintiff received a credit alert notifying her that the defendant was reporting information about a debt to her credit report. Prior to reporting the debt, the defendant allegedly did not make any attempt to speak to the plaintiff or otherwise notify her of its intention to attempt to collect on the debt.
- The credit alert was allegedly the first notice the plaintiff received about the existence of the debt, according to the complaint.
The claims: Under Regulation F, collectors are required to either speak to a consumer over the phone or send a letter or email to the consumer about the debt and then wait a “reasonable” amount of time to ensure the message is not returned due to being undelivered.
- The complaint accuses the defendant of violating Sections 1692d, 1692e(10), and 1692f of the FDCPA and Section 1006.30(a) of Regulation F.
- The complaint seeks to include anyone else living in the United States whose first notice of an attempt to collect on a debt by the defendant was reporting of the debt on a credit report.
- There is an error in the prayer for relief section of the complaint in which the plaintiff asks the court to determine the issue of Cenlar’s liability, which is not the defendant named in the suit.
- The complaint is seeking $1,000 per class member or $500,000 for the class collectively.
