In a ruling that could help consumers nationwide, a federal appeals court has ruled that debt collection agencies can’t shirk responsibility for abuses by blaming the abuse on creditors. In an opinion written by Judge Mary Schroeder, the U.S. Court of Appeals for the Ninth Circuit ruled that the federal Fair Debt Collection Practices Act requires debt collectors to prove that they have used detailed procedures to ensure that they do not take actions that are prohibited by the act, such as harassing consumers, overbilling or making deceptive statements. The court added:
A debt collector is not entitled to just sit back and wait until a creditor makes a mistake and then institute procedures to prevent an occurrence.
The case involved an Arizona resident who was contacted by a debt collector about an outstanding bill from his old apartment complex. The debt collector, National Credit Systems Inc., had tacked on charges for “attorney’s fees,” but couldn’t explain where the charges came from. The collection agency claimed that it had overlooked the error because the landlord-creditor had always provided accurate information in the past. The court rejected that defense, holding that debt collectors must show detailed preventive procedures to escape liability for their actions. Deepak Gupta, a lawyer for Public Citizen who argued the case, says:
The court’s ruling will compel debt collectors to police themselves more effectively. The ruling is very significant at a time in which increasing numbers of Americans are being contacted by debt collectors and abuses are on the rise.
This is another example of how Public Citizen works to protect ordinary citizens. This was a significant ruling by the court and Public Citizen is to be commended for filing the suit.
Source: Public Citizen
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