• DYE CULIK PC | Consumer Protection Division

Consumer Wins Jury Verdict Against Debt Collector LTD Financial for Violating FDCPA

debt collector violates FDCPA

LTD Financial Services violated the Fair Debt Collection Practices Act, a decision that may reverberate throughout the debt-collection industry.

In the lawsuit, the consumer claimed that LTD Financial Services “lure[d] unsuspecting consumers” into paying on debts that were barred by the statute of limitations, which resulted in reviving the statute of limitations on those debts.

This violated the FDCPA, claimed the lawsuit, because LTD Financial Services’ letter failed to disclose that paying the debt would revive the statute of limitations, making the debts collectible again. Section 1692e of the FDCPA prohibits this type of “false or misleading” representation. Section 1692f of the FDCPA prohibits “unfair or unconscionable” debt-collection practices.

Debt collectors are not prohibited from sending collection letters asking for payment on debts that are past the statute of limitations. But, the Federal Trade Commission has said that when a debt collector does so, it must: (1) tell the consumer that it cannot file a lawsuit to collect; and (2) tell the consumer that making a partial payment will revive the collector’s ability to file a lawsuit to collect the balance.

The jury found that LTD Financial Services attempted to collect a debt, that it falsely represented the “character, amount, or legal status of the debt” in violation of the FDCPA, that it used a “false representation or deceptive means” to collect in violation of 15 U.S.C. § 1692e, and that it used an “unfair or unconscionable means” of collecting the debt in violation of 15 U.S.C. § 1692f.

The jury awarded the named plaintiff $1,000 in statutory damages. Because this was a class action, the jury also awarded the class 1% of LTD Financial Services’ net worth.

The complaint filed is here: Complaint vs. LTD Financial Services

The verdict slip is here: LTD Financial Services verdict slip

The jury instructions are here: LTD Financial Services jury instructions

This case shows the importance of carefully reviewing collection letters. If a debt is past the statute of limitations, although a debt collector can ask for payment, they are prohibited from filing a collection lawsuit.

Culik Law is a Massachusetts consumer protection law firm. We have filed lawsuits for violation of the FDCPA, and settled cases with most major debt collectors. If you think your rights may have been violated, are being sued in a debt collection lawsuit, or are being harassed by a debt collector, contact us to see if we can help.

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