AG HEALEY FILES BRIEF IN SUPPORT OF PROTECTING CONSUMERS FROM ABUSIVE DEBT BUYERS
Multistate Amicus Brief Argues Companies that Purchase and Collect Defaulted Debt Are Subject to the Fair Debt Collection Practices Act
BOSTON – In her efforts to protect consumers from unlawful debt collection practices, Attorney General Maura Healey joined a multistate amicus brief filed in the United States Supreme Court arguing that debt buyers who purchase defaulted consumer debt and attempt to collect it are subject to the federal fair debt collection law.
“Debt buyers purchasing defaulted consumer debt for pennies on the dollar, only to turn around and pursue consumers using unlawful and harassing collection tactics should be subject not only to state law, but also federal law,” AG Healey said. “It is vital that states have all the resources at their disposal to protect consumers from unscrupulous debt collectors.”
The amicus brief, led by the Oregon Attorney General’s Office, supports the petitioners in Henson v. Santander Consumer USA, Inc. The brief argues that a company that regularly purchases and collects delinquent debts is a “debt collector” subject to the Fair Debt Collection Practices Act (FDCPA). Debt buyers who purchase defaulted consumer debt are, from a consumer’s perspective, no different from debt collectors who do not own the debt. While debt buyers can and should be able to pursue lawful means of debt collection, the law should protect consumers from abuse and deception by such companies.
The FDCPA established a uniform nationwide floor to protect consumers from, among other things, “unscrupulous debt collectors who harass consumers from another State.”
As Congress recognized in enacting the FDCPA, abusive debt-collection practices contribute to “personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy,” inflicting irreparable injury not only on individual consumers but on their families and communities as well.
AG Healey’s office regularly receives consumer complaints about debt-collection abuses and has taken legal action against a number of debt collection companies. In September 2016, the AG’s Office announced that Ditech Financial, LLC, a national mortgage servicer, paid $1.4 million and agreed to strengthen its policies over its alleged abusive debt collection practices that affected more than 5,000 borrower accounts in Massachusetts. In December 2015, AG Healey sued one of the largest debt collection law firms in Massachusetts, Lustig, Glaser, & Wilson, P.C., and its two owners, alleging that the firm repeatedly sued consumers for debts they did not owe or were inaccurate.
Attorneys general involved in today’s amicus brief include Oregon, Alaska, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Iowa, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Mississippi, Minnesota, Montana, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, Vermont, Washington, and the District of Columbia.
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