Sunday, November 04, 2007

More blunders from Creditwrench attempting to give advice

A consumer recently inquired whether or not a collection agency violates the law if they are attempting to collect a debt in a state which requires them to be licensed, but they are not so licensed.

The false and misleading information provided by Creditwrench CEO Bill Bauer is as follows:

"If a debt collector operates in Texas without a license that matter is only between the debt collector and the State of Texas. It is state law that is violated if they collect debts and do not have a license to do so and the state is the injured party, not the consumer. There is no requirement in FDCPA that debt collectors be licensed to collect debts."


Though state statute may not provide for a private right of action for a consumer that is the subject of unlicensed collection activity, the FDCPA does.

If a collection agency must be licensed in a given state, and they are not, they are taking an action that cannot legally be taken in violation of § 1692k and 1692e of the FDCPA.

The courts have been quite clear in this regard, and many consumers have prevailed in exactly such cases.

For example, in Picht v. Jon R. Hawks, Ltd., 236 F.3d 446, 448 (8th Cir. 2001) the court stated:
The FDCPA prohibits, inter alia, the use of debt collection practices that violate
state law. See 15 U.S.C. § 1692e(5) (prohibiting debt collectors from using "false,
deceptive, or misleading representation or means in connection with the collection of any debt," which specifically includes "[t]he threat to take any action that cannot legally be taken"). The Act provides a damages remedy to debtors who have been subject to such unlawful collection practices.


And, in Johnson v. Riddle, No. 01-4028, 2002 WL 1381233, *6 (10th Cir. 2002):
When the alleged FDCPA violation is an improper use of state proceedings, liability under the federal statute turns on the propriety of the debt collector’s conduct under state law.

You don't need to ask the collection agency if they are licensed. Make a simple phone call to the state's licensing authority who will more than happy to tell you whether or not they are licensed.

Shows again how little Creditwrench CEO Bill Bauer knows about the FDCPA. And, how false, misleading, and useless his "expert" advice is.





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