Can a Debt Collector Really Do That?

Massachusetts has strong consumer-focused laws to protect against unfair, deceptive, or unreasonable debt-collection tactics. Our state’s debt collection regulations largely mirror the federal Fair Debt Collection Practices Act (“FDCPA”). Both the state and federal statutes regulate debt collection practices and prohibit unfair and deceptive conduct by a debt collector collecting consumer debt, which can include defaulted credit card accounts, internet lending loans, private student loans, and even old judgments. 

Defendants in debt collection lawsuits fare far better when they have counsel than when they try to go it alone. When consumers are represented by counsel in debt collection actions, they prevail on the merits of the case about 85% of the time; but when consumers do not have counsel, the debt collector wins about 75% of the time (Source). When consumers fail to respond to a debt collection lawsuit, it’s all but assured that a “default” judgment will enter against them, with post-judgment interest accruing at 12% / year, and the judgment is valid for 20 years. It is common for debt buyers to purchase old, long-forgotten judgments for pennies on the dollar and use them to put liens on your home, garnish your wages, or even seize your car or other personal property.

Third-party debt buyers purchase charged off debt for pennies on the dollar, and sometimes employ aggressive tactics to try to collect the full original amount of the debt – plus up to 12% annual interest on that debt. Often times, the debt is very old and consumers no longer have any records to use to defend against debt collection actions. Even then, you still have rights and defenses. 

One Massachusetts debt collector, Champion Funding, and its collection affiliate, Judgment Acquisitions Unlimited, have become well-known by Massachusetts consumer protection attorneys for using aggressive and sometimes unlawful tactics to collect debts. Champion Funding purchases old default judgments, often more than ten years old, and hires constables to seize vehicles in order to force consumers to pay. In several cases, in the process of collecting debts for Champion Funding, Judgment Acquisitions Unlimited has authorized constables to seize vehicles which had either no equity or no resale value. After Judgment Acquisitions seized one debtor’s car that was newly refinanced and had no equity, Owner Andrew Metcalf stated that he doesn’t care if a car he seizes has no value, because he knows he can either get the debtor to pay to get the car back, or alternatively, he can get the bank that holds the car loan to pay him to get their collateral back. 

While it is legal to seize certain assets/property in order to satisfy a debt, it is not legal to seize personal property in order to use it for coercion purposes, when the debt collector has no actual ability or intention to sell the seized asset to satisfy the debt. 

In two other recent cases, Judgment Acquisitions Unlimited, acting on behalf of Champion Funding, seized vehicles that didn’t belong to the actual debtors, but instead belonged to consumers with similar names. In both cases, Judgment Acquisitions Unlimited refused to immediately release the vehicles and instead continued to demand payment from the vehicle owners, who did not owe Champion Funding any amount at all. In one case, after the court informed Champion Funding that the wrong vehicle was seized, Judgment Acquisitions Unlimited finally released the vehicle, but made the vehicle owner pay over $700 to the tow lot just to get his car back. 

If a debt collector uses unfair and deceptive means to try to collect a debt, under both federal and state laws, you may be entitled to recover damages and an award of your reasonable attorney fees if you prevail.  

What type of conduct is considered unfair and deceptive? Below are just a few examples of conduct that violates both federal and state law – the full list is much longer. 

• Mis-stating the amount of the debt that you owe; 

• Failing to correctly identify the original creditor that issued the debt; 

• Failing to disclose to you that the debt they are trying to collect may be beyond the statute of limitations;

• Calling you more than 2 times in any one-week period, calling you before 8am or after 9pm, calling you directly if they know you are represented by an attorney, or continuing to call you after you have told them to stop;

• Failing to notify you of your rights on certain correspondences from debt collectors;  

• Making any false or deceptive statements to coerce you to make payments;

• Sending any correspondence that is designed to look like it is authorized or issued by a court in order to scare you; 

• Taking or threatening to take your personal property without an enforceable security interest; 

• Suggesting that your wages can be garnished without a court order; 

• Taking or threatening to take personal property which is exempt by law 

Attorney Thurbide specializes in defending clients against debt collection lawsuits and represents clients as plaintiffs in unfair and deceptive debt collection practices lawsuits against debt collectors. 

If you are being sued by a debt collector or believe you have been the subject of unfair or deceptive debt collection practices, contact us to learn about your rights.  

Source:
Junk Justice_Statitical analysis of 4400 lawsuits by debt buyers.pdf (masslegalservices.org)