Court Expands FDCPA Application in Class Action Ruling

According to a recent ruling by a U.S. Court of Appeals, a plaintiff’s foreclosure complaints can act as a legal basis for Fair Debt Collection Practices Act (FDCPA) lawsuits. This ruling continues to expand the Third Circuit Court’s interpretation and application of the FDCPA.

This ruling was based on a FDCPA class action lawsuit filed by a mortgager. This plaintiff alleges a law firm working for Bank of America violated FDCPA statutes by filing foreclosure complaints that included amounts for attorney’s fees and other charges, which the complaint stated were already due even though these services for these fees had not yet been performed.

FDCPA Class Action Lawsuit

The Bank of America FDCPA class action lawsuit claims that these foreclosure complaints violated FDCPA rules that expressly prohibit debt collectors like this law firm from employing “false, deceptive, or misleading representations or means in connection with the collection of any debt.”

Additionally, the plaintiff further alleges the FDCPA does not allow collection agencies to collect on debt amounts that are not “expressly authorized by the agreement creating the debt or permitted by law,” which the FDCPA class action lawsuit claims the law firm committed by including the attorney’s fees on the foreclosure complaint.

The Third Circuit court rejected Bank of America’s argument that FDCPA claims cannot be based on formal pleadings. In addition, the court also rejected the defendant’s arguments that a complaint is not a communication to the consumer, but rather to the court, and as such does not fall under FDCPA provisions.

Finally, the Third Circuit court dismissed the law firm’s claim that foreclosure action should not be a basis for a FDCPA class action lawsuit since a mortgager is entitled to protection under Pennsylvania state law.

This Third Circuit Court’s ruling effectively reverses the lower Pennsylvania court’s decision to dismiss the plaintiff’s FDCPA claims in this class action lawsuit. Additionally, the Third Circuit states that because Bank of America foreclosure complaints specifically stated that attorney’s fees totaling to $2,050 were allegedly incurred by the plaintiff and due by a certain date, that the plaintiff’s claim that the law firm had  misrepresented the amount of mortgager’s debt, which qualifies as a FDCPA violation.

This Bank of America FDCPA Class Action Lawsuit is Case No. 14-1816, originally filed in the U.S. District Court for the Western District of Pennsylvania.

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) is a set of federal laws that restrict creditors and debt collectors from practicing unfair debt collection on consumers. While debt collection itself is not illegal, debt collection companies must respect borrowers’ rights and follow protocol, otherwise they may be subject to a FDCPA lawsuit.

According to the FDCPA, unfair debt collections practices that infringe on the rights of the consumer include:

• Debt collection harassment
• Telephone harassment
• False statement and deceptive practices
• Collection of debts not owed by the consumer
• Collection of expired debts
• Improper reporting of the debtors loan to credit reporting agencies
• Refusing to cease communication even under request
• Improper communication between the lenders and other third parties

Many consumers are filing FDCPA lawsuits against loan servicers or debt collectors like Bank of America and the law firms carrying out the collections.

Join a Free Unfair Debt Collection Class Action Lawsuit Investigation

If a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.