Debt Collection

Harlan v. NRA Group, LLC, d/b/a National Recovery Agency, --- F. Supp. 2d ---- (E.D.Pa. Feb. 9, 2011) – Collection letter found to create confusion and uncertainty in consumer by the use of the phrase “presumed to be valid” instead of “assumed to be valid,” and the exclusion of the phrase “by the debt collector.”  Burden is on the debt collector to be clear in compliance with FDCPA notice rules.These subtle changes were enough to create uncertainty in “the least sophisticated debtor.”

Mushinsky v. Nelson, Watson & Assoc's., 642 F. Supp. 2d 470 (E.D. Pa. 2009) - Collection letter which labeled as “Principal” underlying interest and fees charged by original creditor was deceptive under the FDCPA. Stating "principal", by definition, does not include "interest", the court held that calling an amount containing interest "principal" is inaccurate and misleading to consumers.

Reed v. Pinnacle Credit Serv.,LLC, 2009 WL 2461852 (E.D. Pa. Aug. 11, 2009) – Misleading consumers into waiving a statute of limitations defense by enrollment in a payment “program” by which a portion of the consumer’s time-barred debt is subjected to a fresh four-year statute of limitations states a claim as an unfair and unconscionable collection tactic prohibited by the FDCPA.

Rosenau v. Unifund Corp., 539 F.3d 218 (3d Cir. 2008) - Court of Appeals held that debt collection letter which stated it was from a large debt collector’s “Legal Department” may be, deceptive and misleading under the Fair Debt Collection Practices Act (FDCPA) where it improperly implies attorney involvement where there was none. 

*UPDATE:  
On August 10, 2009, Judge Cynthia Rufe of the United States District Court for the Eastern District of Pennsylvania granted Final Approval to an FDCPA class action settlement in Rosenau benefitting nearly one thousand Pennsylvania consumers.

Watson v. NCO Group, Inc., 462 F. Supp. 2d 641 (E.D. Pa. 2006) - Debt collector, who made dozens of  automated “robo-call” debt collection calls to a consumer who owed no debt ,violated the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA).

Brown v. Card Service Center, 464 F.3d 450 (3d Cir. 2006) - A debt collection letter that stated her case “could” be referred to attorney and suit “could” be filed may be deceptive and misleading under the Fair Debt Collection Practices Act (FDCPA).  The U.S. Court of Appeals agreed, holding a debt collection letter may be deceptive if the debt collector had no intention of taking and has never or very rarely sued.  An important case setting broad principles for consumer deception in at least Pennsylvania, New Jersey and Delaware.

McCall v. Drive Financial Services, L.P., 236 F.R.D. 246 (E.D. Pa. 2006) - Federal court certified a class action on plaintiff’s claim that an auto finance company violated the Fair Debt Collection Practices Act (FDCPA) by having its collection department send out collection notices with false threats on purported lawyer letterhead – where the lawyer had no involvement.  This case eventually yielded the highest reported statutory damage award to the consumer in the United States.

Hage v. General Service Bureau, 306 F. Supp. 2d 883 (D. Neb. 2003) - In a Fair Debt Collection Practices Act (FDCPA) case on behalf of some 5000 Nebraska consumers, the Court found that collection of interest and attorney fees in excess of the debt without first obtaining a court judgment was a violation of state law and the FDCPA.  Over $430,000 in overcharges were ordered refunded, with the collector agreeing to stop the conduct in the future.

Identity Theft and Credit Reporting

Ciccarone v. B.J. Marchese, Inc. 2004 WL 2966932 (E.D.Pa. Dec. 22, 2004) - A class action suit involving stolen identity and credit records of thousands of customers by a Montgomery County car dealer. Some $2.45 million was recovered to pay off car liens, clear titles and compensate consumers for credit damage caused.

Lukens v. Dunphy Nissan, Inc., 2004 WL 1661220 (E.D. Pa.  July 26, 2004) - The consumer, a victim of identity theft by an employee of defendant car dealership, was entitled to sue the dealership for a violation of the Fair Credit Reporting Act (FCRA) where the dealership accessed his credit report for an impermissible purpose.   This Nissan dealer put a new salesman on the floor who had eight previous convictions for forgery and theft by deception.

Evantash v. G.E. Capital Mortg. Services, Inc., 2003 WL 22844198 (E.D. Pa. Nov. 25, 2003) - Federal court held that inaccurate reporting by credit bureau despite creditor's notification that information was incorrect could rise to the level of conscious or reckless disregard of plaintiff's rights justifying an award of punitive damages under the Fair Credit Reporting Act (FCRA).

Automobiles

Nawrocki v. Faulkner Ciocca Ford of Souderton, 2007 WL 3146671 (E.D. Pa. Oct. 29, 2007) - A Bucks County car dealer made it a practice in closing the sale, of having the consumer  sign a "Spot Delivery" rider.   Federal Court agreed that this widespread practice, if proven at trial, would violate Pennsylvania law. A dealer may not sell a car and complete all documentation, then have the consumer sign a side-letter saying "I promise to return this car if the dealer has trouble placing my loan."  A dealer is obliged to find out any issue before – not after – delivery.

Applebaum v. Nissan Motor Acceptance Corp., 226 F. 3d 214 (3d Cir. 2000) - Federal appeals court ruled that Nissan Motor Acceptance Corporation violated consumer leasing laws by failing to disclose the anticipated future value of the car at the lease end. This is a key component in computing a consumer’s Early Termination liability.

Consumer Product Warranty

McGee v. Continental Tire North America, Inc., 2007 WL 2462624 (D.N.J. Aug. 27, 2007) - In nationwide product defects class action, a New Jersey federal court denied defendant tire manufacturer’s motion to dismiss the consumer class’s claims for relief under the federal Magnusson Moss Warranty Act.   The consumer’s claim that Continental Tires installed on new Chrysler 300 autos became unserviceable after as little as 5,000 – 10,000 miles of use. 

*UPDATE:  
On March 4, 2009, Chief Judge Garrett Brown of the District of New Jersey granted final approval of a settlement that provides a cash fund of $5,000,000 to $8,000,000 to the Class.

Consumer Fraud

Sabol v. Meenan Security Services, No. 03-04502 (Pa. Com. Pls. Delaware Co. 2003) - Suit against a home-security firm that refused to let a consumer cancel without penalty despite the alarm going off needlessly.  The agency failed to comply with Pennsylvania’s tough rules on in-home sales.  Delaware County Court of Common Pleas approved a class settlement worth over $700,000 and the security firm revamped its contract and disclosures.