Fair Debt Collection: When Promises Aren't Good Enough

Creditors don't often accept a person's promise to pay and leave it at that. That creditor will follow up, repeatedly, sometimes multiple times in a single day. The creditor will harass you by phone, mail collections letters, and send the repo-man to take your car from the driveway.

By the same token, a promise to pay is just not good enough in a court of law, as Patrick Lunsford reports for Inside ARM, although in this case it was a collection agency's promise to pay.

A federal appeals court ruled in favor of three consumers' lawsuits involving the Fair Debt Collection Practices Act (FDCPA), effectively holding that the collection agency's promise to pay the judgment was not good enough.

Here's what happened:

The collection agency, after having been sued by the consumers for violations of the FDCPA, offered what it characterized as full relief under the law. (In fact, it offered $1,001 to each consumer, which was $1 more than the full measure of damages under the law.)

The consumers rejected that offer, prompting the collection agency to seek a (successful) dismissal. The consumers brought an appeal to the U.S. Court of Appeals for the Eleventh Circuit, arguing that in fact the collection agency's offer wasn't full relief because the offer did not include an offer to have judgment entered against the collection agency, as Lunsford reports.

The appeals court agreed.

Because the offer did not include judgment entered against the collection agency, simply offering to pay $1,001 - even though it was $1 more than the full measure of statutory damages allowed for a consumer under the FDCPA - amounted to little more than a mere promise.

And promises, as creditors are often quick to point out, aren't worth much.

Source: Three FDCPA Cases Revived in One Appeals Court Decision

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