A District Court judge in California has granted a defendant’s motion to compel arbitration in a Fair Debt Collection Practices Act case after the defendant was accused of continuing to contact the plaintiff after she refused to pay the debt.
The background: The case was brought under both the FDCPA and California’s Rosenthal Fair Debt Collection Practices Act. The plaintiff alleged that the defendant contacted her multiple times after she sent a letter refusing to pay a debt originally incurred through a credit card.
- After the original creditor sold the debt to the defendant in 2020, the plaintiff claims she received a letter soliciting financial information under the pretense of a hardship application, despite the letter also stating that it was not an attempt to collect a debt.
- The complaint further alleged that the defendant made false, deceptive, or misleading representations in an effort to collect the debt.
The ruling: Judge Kirk E. Sherriff of the District Court for the Eastern District of California found that a valid and enforceable arbitration agreement existed and covered the plaintiff’s claims.
- The original creditor included a binding arbitration clause in its cardholder agreement that applied to “any dispute or claim” related to the account, and which explicitly allowed for the assignment of those rights.
- The defendant, having acquired the account and the rights under the agreement, successfully argued it could enforce the arbitration provision as a non-signatory.
- Interestingly, the plaintiff did not oppose the motion to compel arbitration. The Court noted that “the arbitration clause is broad, covering ‘any dispute or other claim’ that is not explicitly excluded,” and that both FDCPA and Rosenthal Act claims were squarely within its scope.
