Our law practice strives to do three things, and do them well:
- Defend debt lawsuits;
- Overturn default judgments; and
- Hold debt collectors liable under the Fair Debt Collection Practices Act ("FDCPA").
A frequent issue that arises during the defense of our clients' cases is the scope of litigation conduct covered by the FDCPA to recover damages for unfair practices.
This case discussed in this blog entry, Polanco v. NCO Portfolio Management, Inc.,[1]represents a win for the consumer making two litigation-based grievances under the FDCPA.
The plaintiff in Polanco sued debt buyer, NCO Portfolio Management, Inc.,[2] and law firm Mel S. Harris & Associates, LLC[3] for
- The fraudulent practice of "sewer service"; and
- NCO's waiting 10 months to comply with a court order directing the return of the consumer's money.
The defendants moved to dismiss both claims essentially arguing that even if both are factually true, they do not involve the type of collection activity governed by the FDCPA.
The court disagreed first acknowledging the highly publicized Sykes v. Mel Harris for the legal holding that FDCPA liability may attach in connection with securing default judgments premised on falsified affidavits of service. The court reiterated the view that this practice could be considered unfair, deceptive, and/or harassing.
Secondly, citing the "non-exhaustive list" of unfair and abusive practices prohibited, the court noted that the refusal to obey a court order to return money could be considered "abusive." Interestingly, this holding seems to conflict with a decisionrendered by the same court written a mere four days later. In Okyere, the Southern District held that the knowing retention of money in violation of a court order did notviolate the FDCPA because the conduct amounted to actual unlawful action taken versus a threat to take to take such action.
NCO's motion for dismissal was denied.
Call us immediately if you are facing a money judgment.