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  4.  — Was Continental Service Group, Inc. Sued for Allegedly Committing Unlawful Debt Collection in Violation of the FDCPA?

Was Continental Service Group, Inc. Sued for Allegedly Committing Unlawful Debt Collection in Violation of the FDCPA?

by | Jul 14, 2021 | Firm News |

Yes.  In the U.S. District Court for the Northern District of Illinois, a federal lawsuit was filed against Continental Service Group, Inc. (“Continental Service Group” or “ConServe”) – which is a debt collector – for alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq.

The Fair Debt Collection Practices Act is a federal law that regulates the actions of debt collectors.

Any debt collector that has allegedly violated a consumer’s rights under the Fair Debt Collection Practices Act (“FDCPA”), can be sued by a consumer for statutory damages of up to $1,000; actual damages including, but not limited to, harm or loss that resulted from a debt collector’s actions; as well as the consumer’s attorney’s fees and costs.

The docket number for the case is Case No. 1:19-cv-05779.

The plaintiff alleged that the plaintiff filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code.  The Plaintiff alleged that the plaintiff filed a Schedule E – Creditors Holding Unsecured Priority Claims – listing the Internal Revenue Service (“IRS”), and that afterwards the plaintiff filed his Chapter 13 plan, which was amended twice.  The plaintiff alleged that afterwards the IRS filed a proof of claim, and then two more amended proof of claims.  The plaintiff alleged that the Bankruptcy Court then confirmed the plaintiff’s Chapter 13 plan.

The plaintiff alleged that the Chapter 13 Trustee subsequently filed a Notice of Completion of Plan Payments, and that the Bankruptcy Court entered an Order of Discharge for the benefit of the plaintiff under 11 U.S.C. § 1328(a).  The plaintiff alleged that the discharge by operation that the plaintiff received released the plaintiff’s personal liability towards to IRS.  The plaintiff alleged that subsequently, however, the IRS referred some of Plaintiff’s accounts to ConServe for collection.

The plaintiff alleged that ConServe sent the plaintiff an initial debt collection letter, stating that Plaintiff presently owed on some of the IRS’ accounts and implying that the delinquent tax obligations were immediately due, when those accounts were subject to a bankruptcy discharge injunction.

The plaintiff alleged that ConServe’s post-discharge collection attempt(s) caused the plaintiff to believe that the filing of the bankruptcy was futile, and that he remained presently and immediately obligated to the IRS for debts that were subject to the bankruptcy discharge injunction, and that this was therefore a violation by ConServe of the FDCPA, as its actions and/or statements were misleading, unfair, and unconscionable.

In the United States District Court for the District of South Carolina in the Aiken Division, another federal lawsuit was filed against Continental Service Group and its agents for alleged violations of the FDCPA. The docket number for this case is Case No. 1:13-cv-00576-JMC.

The plaintiff alleged that in attempts to collect the debt, the defendant called the plaintiff before 8 o’clock a.m. local time. According to the FDCPA, debt collectors cannot contact individuals before 8 a.m. or after 9 p.m. if they do not have prior permission to do so. The plaintiff also alleged that the defendant tried to contact the plaintiff at their workplace even after the defendant was told that the plaintiff’s employer prohibited this type of communication. Additionally, the plaintiff alleged that the defendant contacted and tried to communicate with the plaintiff many times for the purpose of harassing the plaintiff. The plaintiff alleged that the defendant also made threats to garnish the plaintiff’s wages, even though it did not have the legal right to do so and could only make a recommendation to the original creditor to start legal proceedings.

The plaintiff alleged that the defendant violated the FDCPA by attempting communication at a place that was known to be inconvenient for the plaintiff, by communicating before 8 a.m., by engaging in behavior that resulted in harassment, by falsely implying that garnishment would occur even though they did not have the legal ability or the intent to take the action, and by using unfair and unconscionable means during the collection process.

Continental Service Group was also sued in the United States District Court for the District of Colorado for alleged violations of the FDCPA. The docket number for this case is Case No. 1:06-cv-01876-RPM-PAC.

The plaintiff alleged that he incurred a student loan debt which he had made prior payments on but had eventually defaulted on. The plaintiff alleged that for four years, his tax return had been seized and applied to the debt and that this debt was transferred to the defendant for collection. The plaintiff then alleged that a debt collection agent called him on the phone and informed him that he must make arrangements to pay the debt, saying that the only acceptable option was for the plaintiff to pay the defendant $350 a month until the debt was paid off. The plaintiff alleged that when he told the agent that he could not afford to provide these payments, another agent then threatened to garnish the plaintiff’s wages if he did not provide an immediate payment for the full amount of debt. The plaintiff also alleged that the agent informed him that they would begin to garnish his wages within 72 hours and that as a result of the garnishment, an extra $4,000 would be added to the remaining debt.

The plaintiff then alleged that he received another call from the defendant and was told that had to arrange payment for the debt and that his place of employment was verified to prepare his garnishment. The plaintiff alleged that he once again told the defendant that he did not have the means to make a payment on the debt. After, the plaintiff alleged that the defendant called him again to inform him that his account would be submitted as “refusal to pay” if the plaintiff did not make a payment arrangement on that day. Additionally, the plaintiff alleged that the agent told him that he would send the account to the garnishment department, as well as a letter to the plaintiff’s employer, but that he provided an amount for a lowest settlement offer. The plaintiff alleged that he told the agent that he could not afford to settle the debt and the agent then replied that if the plaintiff could not make payment arrangements within three days, his account would be sent to be garnished. The plaintiff alleged that three days after the previous phone call, he called the defendant and was told that if he could not make a payment on that day, his account would be sent to the garnishment department.

Additionally, the plaintiff alleged that a few days later, the defendant called his brother to inquire about the name of the plaintiff’s employer and revealed to his brother that they were calling to collect a debt that the plaintiff owed. The plaintiff alleged that this brother told the defendant that he did not want to communicate with them because it was not his own debt. The plaintiff alleged that the following day, he called the defendant to ask why his brother was contacted about his debt and the agent informed the plaintiff that he had given prior permission for his brother to be contacted. However, the plaintiff alleged that he did not give permission to the defendant to contact his brother about the debt. The plaintiff then alleged that the agent again told him that he would have to submit the account for garnishment. Additionally, the plaintiff alleged that the defendant had not filed any legal proceedings against him.

The plaintiff alleged that in violation of the FDCPA, the defendant used false or misleading representations by threatening to garnish his wages even though they did not have the intention or the legal right to do so. Additionally, the plaintiff alleged that the defendant violated the FDCPA by communicating his debt to a third party without his given consent. The plaintiff also alleged that the defendant engaged in actions with the intent to harass the plaintiff into forcibly paying the debt.

In the United States District Court for the District of Minnesota, another federal lawsuit was filed against Continental Service Group for alleged violations of the FDCPA. The docket number for this case is Case No. 0:17-cv-03310-WMW-TNL.

The plaintiff allegedly owed a student loan debt to the U.S. Department of Education, a creditor, which was transferred to the defendant for collection purposes. However, the plaintiff alleged that he did not owe this debt and had disputed this debt many times to both the creditor and the defendant. The plaintiff alleged that the creditor sent him a Notice of Proposed Wage Garnishment and that after receiving the notice, the plaintiff mailed back a written objection in which he requested a hearing with the creditor to dispute the debt. However, the plaintiff alleged that the creditor denied his request for a hearing and instead sent him a Garnishment Hearing Decision which gave the plaintiff 15 calendar days to contact the defendant and create a payment agreement. The plaintiff alleged that before the deadline, he contacted the defendant about the alleged debt and provided them with his financial information in order to set up a payment arrangement and avoid garnishment. Additionally, the plaintiff alleged that an agent of the defendant informed him that he qualified for a $5.00 per month payment arrangement which would allow him to avoid wage garnishment. The plaintiff also alleged that before they ended the call, the agent informed him that they would send him a written version of the payment agreement.

However, the plaintiff alleged that after this agreement was made, he received another letter from the defendant which wrongly stated that the plaintiff did not reply to the previous notice and informed him that they would commence with the wage garnishment. The plaintiff then alleged that after receiving this letter, he called the defendant to clarify that the original payment agreement was still in effect and to confirm that the wage garnishment would not occur. The plaintiff alleged that while the defendant did confirm that the arrangement was in place and that the garnishment would be stopped, they informed the plaintiff that they had already sent a wage garnishment notice to the plaintiff’s employer. The plaintiff alleged that the defendant prematurely sent a Wage Garnishment Order to the plaintiff’s employer before the deadline that was provided by the previous garnishment notice and that the order was received before the defendant could stop it.

The plaintiff alleged that even though he disputed the debt, he still set up a payment agreement before the deadline given by the creditor’s notice. Additionally, the plaintiff alleged that the defendant’s actions in this situation (the failure to create a payment arrangement, the failure to provide a timely report of the arrangement to the creditor, the failure to stop the wage garnishment order, and the preemptive issuing of the order) were in violation of the FDCPA. The plaintiff alleged that the conduct of the defendant had the natural consequence of harassing or abusing the plaintiff and that they used misleading and unfair means to collect the debt. The plaintiff also alleged that the defendant used false or misleading representations by threatening to move forward with wage garnishment which is an action that they could not legally take.

Another federal lawsuit was filed against Continental Service Group in the United States District Court for the Middle District of Georgia for alleged violations of the FDCPA. The docket number for this case is Case No. 3:18-cv-00138-CAR.

In this case, the plaintiff alleged that he incurred a student loan related debt that was contracted to the defendant for collection purposes. The plaintiff alleged that he filed for Chapter 13 bankruptcy and as a result, the debt was discharged around 2009 by the Bankruptcy Court’s order and the plaintiff no longer had a legal responsibility for the debt. The plaintiff then alleged that even though the debt was discharged, the defendant still took collection action against him by wrongfully garnishing his wages. The plaintiff alleged that the defendant violated the FDCPA by using false, deceptive, and unfair means during the collection of the debt through the garnishment of his wages and the collection of a debt that was discharged by bankruptcy. Additionally, the plaintiff alleged that the defendant falsely represented the character or legal status of the debt and took action that it legally did not have the right to take.

 

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act (“FDCPA”) is a federal statute enacted by the 95th United States Congress. The purpose of this statute is to encourage fair debt collection, to eliminate unlawful debt collection practices, and to provide legal protection for consumers against debt collectors. The types of debt covered by the FDCPA are consumer debts, including but not limited to credit card debt, student loans, auto loans, and mortgages.

The FDCPA prohibits certain behaviors during the debt collection process and pursuant to the statute, there are a number of actions that a debt collector cannot engage in when attempting to collect a debt. For example, when speaking with a consumer, a debt collector cannot threaten them with harm or with actions that they cannot take, lie to them, swear or use foul language, or pretend that they are a government agency or a law enforcement agency, amongst other things. Additionally, there are restrictions as to when a debt collector is allowed to communicate with a consumer. For example, a debt collector cannot call an individual between the hours of 9 p.m. and 8 a.m. and if they have already told them to stop calling, the debt collector must cease their calls to both their personal phone and their workplace. A debt collector also cannot call a consumer during time periods that they have indicated are inconvenient for them. Moreover, in most states, and unless a debt collector is a debt collection law firm, a debt collector cannot threaten to sue a consumer; as they do not have the present right to do so. In these cases, the right to sue remains with the original or current creditor.

If a debt collector has violated a consumer’s rights under the FDCPA, the consumer can sue them for damages. The consumer could be entitled to statutory damages of up to $1,000.00, as well as actual damages including, but not limited to harm or loss that resulted from a debt collector’s actions.