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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.
Two of the areas where collection areas are likely to make mistakes are around the licenses they need to operate in certain states and the statutes of limitations. A number of companies, including a creditor, a debt buying organization, a collection operation, and a collection law firm are facing a class-action lawsuit in New Jersey federal court accusing them of violating the Fair Debt Collection Practices Act and state law in Pennsylvania over how it attempted to collect on a deficiency balance after a vehicle was repossessed.
The background: The plaintiff, who lives in New Jersey, purchased a used vehicle in Pennsylvania back in 2017. About two years later, in August 2019, the plaintiff stopped making payments, and the complaint states that she defaulted on the loan a month later. She returned the vehicle, and in December 2019, it was sold, leaving the plaintiff with a balance of $8,326.65.
- In 2023, the debt was assigned to debt buyer. In December 2024, a collection lawsuit was filed against the plaintiff in New Jersey state court. The complaint notes that the suit was filed five years, three months, and 26 days after the plaintiff’s last payment. The statute of limitations in New Jersey and Pennsylvania is four years, according to the complaint.
The claims: The suit accuses the defendants of violating Sections 1692d, 1692e(2)(A), 1692e(5), 1692e(10), 1692f, and 1692g of the FDCPA by:
- falsely representing the defendants had the legal right to collect the debt even though the statute of limitations had expired.
- threatening to take legal action that could not legally be taken by filing a collection lawsuit after the statute of limitations had expired.
- As well, some of the defendants are accused of violating the Pennsylvania Consumer Credit Code because one of the defendants was not licensed at the time it acquired the contract.
- Some of the defendants are also accused of violating the New Jersey Consumer Finance Licensing Act and the New Jersey Consumer Fraud Act when they acquired the debt.
- The complaint seeks to include anyone living in Pennsylvania or New Jersey for which the defendants attempted to collect on an alleged consumer debt that was originated or transferred to an entity that was not properly licensed in either state and for which the statute of limitations had expired.
