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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.
Payment arrangements, especially those preventing a judgment from being entered against a consumer, are important. But when an automatic payment isn’t debited from a consumer’s account, whose fault is that? A consumer has filed a lawsuit, accusing a collection law firm of violating the Fair Debt Collection Practices Act because it failed to process a consumer’s payment after he had used the firm’s portal to enroll in a recurring payment plan, and accusing the owner of the account for violating the FDCPA because it should be held liable for the law firm’s actions.
The background: The plaintiff was the victim of identity theft, when her sister took out an account in her name. She made payments on the loan until she passed away, at which point the account fell into default and the plaintiff learned about the account for the first time.
- The law firm, on behalf of the owner of the account, filed a collection lawsuit against the plaintiff. The case was referred to a court-ordered mediation. During the mediation, the two sides reached an agreement to settle the account fo 60% of the balance that was owed, which would be paid in 60 monthly installments.
- An attorney for the law firm helped the plaintiff set up an online account on the firm’s portal and enroll in recurring monthly payments. The attorney confirmed the payment arrangement had been properly established, according to the complaint.
- The first payment was processed successfully. The firm failed to process the second payment, according to the complaint, at which point the plaintiff was notified that the owner of the account had obtained a final judgment for the full balance of the debt.
- The plaintiff attempted to log into the portal, but was unable to do so, according to the complaint.
- The plaintiff made “multiple” calls and sent “multiple” emails to the firm seeking assistance, but never received a reply, according to the complaint.
The claims: The complaint accuses the law firm of violating Section 1692e(2)(A), 1692e(10), and 1692f of the FDCPA for obtaining a judgment using false, deceptive, or misleading statements by claiming the plaintiff had defaulted on the arrangement, when it was the firm that “caused the manufactured default.”
- Along with the wasted time meeting with her attorney and attempting to contact the law firm, the plaintiff has been embarrassed and humiliated because the judgment is now part of the public record. Her worry over having her wages garnished or funds in her bank account seized have caused her anxiety, sleeplessness, and persistent worry.
- The complaint also accuses the owner of the account for violating Sections 1692e(2)(A), 1692e(10), and 1692f because it should be held vicariously liable for the actions of the firm, which was collecting on its behalf.
