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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 isn’t an accusation that shows up a lot in complaints against companies in the credit and collection industry much these days, nor are allegations that there was a violation of Regulation F. But a consumer is accusing a creditor and collection operation of violating Reg F, the Fair Debt Collection Practices Act, and state law in Florida by furnishing information about a “bogus” debt to the credit reporting agencies without first notifying him about the existence of the debt.
The background: The plaintiff is a business owner who takes out bridge loans to help with company expenses during the fourth quarter. But when he applied this past November, “much to his great shock,” he found that a debt he was unaware of on his credit report.
- “Upon investigation,” the plaintiff learned the debt in question was an unpaid lease in the amount of $23,791 related to an apartment that the plaintiff claims never to have signed.
- The plaintiff was never notified or otherwise made aware of the debt prior to it being added to his credit report, according to the complaint.
- As a result of the defendants’ actions, the plaintiff’s was forced to pay additional interest, expenses, and finance charges as well as suffer “extreme mental anguish and emotional distress” among other damages.
The claims: While not a specific claims against the defendants, the complaint notes that Regulation F prohibits the practice known as “debt parking,” where furnishers report information about a debt to the credit reporting agencies without notifying the consumer. The practice is intended to pressure the consumer to pay the debt faster to repair his/her credit score. Regulation F requires collectors either speak to the consumer in person, or otherwise communicate information about the debt to the consumer and then wait a “reasonable” amount of time before furnishing information about it.
- The complaint accuses the defendant collection operation of violating Sections 1692d, 1692e(2)(A), 1692e(11), 1692f, and 1692g of the FDCPA. The plaintiff is seeking “damages in excess of $50,000,” for these alleged violations, according to the complaint.
- The complaint also accuses both the creditor and the collection operation of violating the Florida Consumer Collection Practices Act, and again is seeking damages in excess of $50,000.
- The complaint also accuses the creditor of defamation by making false statements about the plaintiff to the collection operation.
