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  4.  — Have repossession companies been sued before for repossessing a vehicle without first sending a Cobb notice when they were supposed to have sent one first?

Have repossession companies been sued before for repossessing a vehicle without first sending a Cobb notice when they were supposed to have sent one first?

by | Oct 6, 2021 | Repossession |

Yes. Lawsuits have been filed against repossession companies for violating people’s rights during repossessions. If a repossession company violated the Fair Debt Collection Practices Act (“FDCPA”), then pursuant to that federal statute, it would have to pay the consumer compensation of up to $1,000 in statutory damages, any actual damages, and cover the consumer’s legal fees and any court costs.

 

In the United States District Court for the District of Minnesota, a federal lawsuit was filed against a creditor and two repossession companies. The repossession companies were sued for alleged violations of the FDCPA and all defendants were sued for violations of Minnesota state law. The docket number for this case is Civil Action No. 0:10-cv-02046-RHK-FLN.

 

The plaintiff alleged that in 2007, he entered into a credit agreement with the creditor in order to finance the purchase of his vehicle. He then alleged that he began to fall behind on his payments in December 2009. The plaintiff alleged that after missing his due dates for payments, the creditor allowed him to make late and partial payments for the loan and accepted two of his payments in the next month.

 

The plaintiff alleged that in February 2010, the creditor hired a repossession company to repossess his vehicle. He alleged that this first repossession company then subcontracted the repossession to a second repossession company. The plaintiff alleged that despite accepting his late payments, the creditor did not send him what is called a Cobb notice. In Minnesota, if a creditor has accepted a debtor’s late or partial payments in the past, they have to provide the consumer with a Cobb notice before they are legally allowed to repossess a vehicle. This notice informs the consumer that they cannot make more late payments, provides them with a date to cure the overdue balance, and reaffirms that there needs to be compliance with the terms of the loan agreement.

 

The plaintiff alleged that in February 2010, he was woken up by his neighbor who informed him that a tow truck was taking his vehicle from its spot in a secured garage. He then alleged that he followed the repossession agent to the side of a road where an argument occurred between the plaintiff and the agent. The plaintiff alleged that the police soon arrived at the scene and that the repossession agent lied to the police officers by claiming that the repossession agent was authorized to enter the parking garage by the property manager and therefore did not trespass or breach the peace. The plaintiff alleged that the defendants were never given any permission to enter the garage and that the garage had clear “No Trespassing” signs attached to the property for the defendants to see. He then alleged that the repossession agent towed away his vehicle and completed the repossession.

 

The plaintiff alleged that the repossession was unlawful because the defendants did not have the right to conduct the repossession since the creditor never provided him with a Cobb notice. He also alleged that the repossession breached the peace, and that the agent trespassed on private property. Thus, the plaintiff alleged that the actions of the repossession companies were in violation of the FDCPA.

 

In the United States District Court for the District of Minnesota, another federal lawsuit was filed against a repossession company and two creditors. The repossession company was sued for alleged violations of the FDCPA and Minnesota state law. The docket number for this case is Civil Action No. 0:14-cv-00441-JRT-FLN.

 

The plaintiff alleged that in October 2013, she purchased a vehicle from one of the defendants. She alleged that after receiving her first billing statement from a creditor in regard to the loan financing for the vehicle, she signed up for the creditor’s website’s auto-payment service. However, the plaintiff alleged that the number for her bank account was unknowingly listed incorrectly so two of her subsequent payments were not posted.

 

The plaintiff alleged that in December 2013, an agent who was believed to be from the repossession company arrived at the plaintiff’s workplace and informed her that he was going to take her vehicle. The plaintiff alleged that since she was unaware that her payments did not go through, she asked the agent why he needed to take the vehicle, to which the agent responded that he did not know the reason for the repossession. The plaintiff then alleged that the vehicle was with her daughter and not in her possession. She alleged that the repossession agent began to threaten her and say that he would call the police if she did not give the car to him. The plaintiff alleged that even though she tried to reason with the agent, he continued with his threats and eventually told her that he would come back to her workplace or house until he received the vehicle. Afterward, the plaintiff alleged that she called her creditor in order to find out why the vehicle was being repossessed. She alleged that no one answered the phone so she just paid off the balances on the billing statements that she missed, which were accepted by the creditor.

 

The plaintiff alleged that the next day, she called the creditor in order to try to ensure that the situation would be fully resolved but that the representative she spoke with could not answer her questions. She also alleged that she called and left a message with the company where she had initially found the vehicle and applied for financing. The plaintiff then alleged that her daughter called her to inform her that a repossession agent was at their house making threats and demanding the vehicle. She alleged that the agent left their house after making more threats.

 

The plaintiff alleged that an employee from the initial company returned her call and informed her that she would only be able to keep her vehicle if she financed the loan with another creditor and paid additional fees. She alleged that the employee promised not to repossess the vehicle after she told him that she could not afford to pay those fees. The Plaintiff alleged that despite this promise, and despite the fact that she had already made the payments on the vehicle that just needed to be processed, her vehicle was repossessed the following day.

 

Additionally, the plaintiff alleged that when she called the same employee the next morning, he told her that she would need to pay the repossession fees in order to recover her vehicle. The plaintiff then alleged that she called her creditor who was unable to help her with the return of the vehicle. The plaintiff also alleged that the creditor still processed her payments even though it had already repossessed her vehicle.

 

The plaintiff alleged that the repossession company violated the FDCPA because it did not have the right to repossess her vehicle since the auto loan’s payment obligations were satisfied. Additionally, she alleged that the repossession company breached the peace during the repossession due to its use of threats, intimidation, and coercion.

 

What constitutes a violation of a consumer’s rights during the repossession process?

A creditor has to comply with the laws of the state that a consumer resides in during the repossession process. Any third-party repossession companies that are hired by the lender of a consumer’s auto loan must follow not only the consumer’s state’s respective state-specific repossession laws but also the Fair Debt Collection Practices Act, a federal law that protects consumers from unlawful debt collectors. Prior to a repossession, and depending on the state, a creditor may have to provide the consumer with a pre-repossession notice before it can legally repossess the vehicle. When conducting a repossession, the repossession company does not have the right to breach the peace. Examples of a breach of the peace include using physical force, being violent, damaging a consumer’s property, and continuing with a repossession after the consumer verbally objects to it; the act is illegal in all U.S. states.

 

In some states, it is illegal for a repossession company to trespass onto a consumer’s property without the consumer’s permission to conduct a repossession on their property. It is also illegal for a repossession company to repossess the incorrect vehicle. Depending on the state, a creditor may have to send the consumer a repossession notice, such as a pre-sale notice for the disposition of the vehicle, and/or a post-sale notice after the repossession has occurred. If a consumer’s vehicle was unlawfully repossessed, it is possible that the consumer would not have to pay any deficiency balance on their loan. If the repossession company violated the FDCPA, then pursuant to that federal statute, the repossession company would have to pay the consumer compensation of up to $1,000 in statutory damages, any actual damages, and cover their legal fees and any court costs.