Court Addresses Unfair Debt Collection Practices

For low-income people in the Chicago area who are dealing with large amounts of consumer debt, being harassed or treated unfairly by debt collectors can be particularly devastating. A recent case out of the U.S. Court of Appeals for the Second Circuit found in favor of debtors in the case, according to a report in the New York Law Journal. While the decision is only binding upon other courts within the Second Circuit, commentators expect that it could be persuasive and could end up playing a role in setting a similar precedent in courts across the country. As such, Oak Park residents should know about the case and how its outcome is a win for consumers who have been victims of illegal debt collection practices under the Fair Debt Collection Practices Act (FDCPA).
The FDCPA and the Case of Arias v. Gutman, Mintz, Baker & Sonnenfeldt, PC
The recent case decided by the Second Circuit, Arias v. Gutman, Mintz, Baker & Sonnenfeldt, PC (2017), could be an important step in holding debt collectors accountable throughout the country for practices that violate the FDCPA. What do you need to know about the case?
According to the Consumer Financial Protection Bureau (CFPB), the case was initially filed in October 2016. It involved “claims under the Fair Debt Collection Practices Act against a debt-collection law firm that allegedly attempted to collect a judgment debt by restraining a consumer’s exempt Social Security benefits.” More precisely, the plaintiff (a consumer) alleged that the defendant debt collector violated section 1692e and 1692f of the FDCPA “by filing a false, deceptive, and misleading affirmation in . . . court and by maintaining a restraint on [the defendant’s] bank account in bad faith.
The case began when the debt collector attempted to garnish the debtor’s Social Security retirement income (SSRI), which was exempt from garnishment under state law. The Social Security Administration (SSA) clarifies that, while this particular case arose outside of the state of Illinois, Social Security benefits typically are exempt from attachment, garnishment, and other types of legal process.
Attempting to Collect Exempt Benefits Violates the FDCPA, Court Says
The court ruled that the debt collector’s actions violated the FDCPA. What do sections 1692e and 1692f of the FDCPA—the specific sections in question—say about prohibited debt collection practices?
The court first clarified the goals of the FDCPA, including to “eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” More specifically, it explained that section 1692 “prohibits false, deceptive, or misleading representations,” while section 1692f “prohibits collecting or attempting to collect a debt through unfair or unconscionable means.”
If you have been treated unfairly by a debt collector who has attempted to garnish exempt benefits, you should discuss your case with an Oak Park consumer protection attorney as soon as possible. Contact the Emerson Law Firm to learn more about how we can assist you.
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