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Courts Rule Collectors Not Required To Go To Trial

Wednesday, June 15, 2016 - Posted by Philip Harvey

Three consumers had brought an action against three debt collection agencies on the basis of violating the Fair Debt Collection Practices Act ("FDCPA") on the basis of misleading or deceptive conduct on the basis of threatening action they do not intend to take.

In these cases:

  • The collection agency had issued a Summons;
  • The collection agency subsequently voluntarily dismissed the proceedings; and
  • The consumers argued that the agencies never had an intention of proceeding to trial, but rather were issued to obtain Default Judgment or a settlement of the outstanding debt.

The Court of Appeal dismissed the proceedings and agreed with the Federal Court, noting that it is not always economic or desirable to go to a trial and a collection agency is entitled to change its strategy at any time in the process.

Source: InsideARM - Debt Collection Lawsuits Revisited: Seventh Circuit Rules Collectors Not Required To Go To Trial

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