As the result of a class-action lawsuit, some Maryland debtors are getting their debts wiped out. The lawsuit states that LVNV Funding LLC, a junk debt buyer who sometimes sues consumers to recover money, was not licensed to collect debts in the state of Maryland, and therefore not able to perform debt collection activities in that state.
As part of the settlement in U.S. District Court in Baltimore, an average $2,800 in debt will be erased for all 3,500 plaintiffs. Each of the two lead plaintiffs — Jason Hauk and Freddy Velazquez — will receive a $2,000 payment as well. The lawsuit accused LVNV of “systematic, intentional, and predatory debt collection activities” against its Maryland debtors, according to the Baltimore Sun.
After the suit commenced, LVNV took steps to get licensed in the state of Maryland, but it was too late. The suit alleged that many suits and collection activities took place before the company was licensed.
Moral of the story: debt collectors continue to break the law and it is only when consumers take matters into their own hands by taking these bad boys to court that their illegal actions can be stopped. Typically, debt collectors have only been stopped in their tracks when state attorney generals get involved, this time, it was a couple of brave consumers.
Most collectors, when they violate the law, violate the Fair Debt Collection Practices Act. Common violations include:
- Harrassing phone calls where profane language is used.
- Threats of imprisonment or jail time.
- Calls before 8 AM or after 9 PM.
In the case of this particular lawsuit, it was simply a matter of using state licensing laws to begin the exposure of the collection agency’s illegal practices.