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Proposed Class Action Lawsuit Claims Debt Collectors Mislead About Credit Card Offers

May 19, 2010

Our Yucaipa unfair debt collection lawyers were interested to note a federal class action against an allegedly crooked debt collector. According to the Roanoke Times and Courthouse News Service, a Virginia man has filed a proposed class action lawsuit against three related debt collection companies for multiple violations of the Fair Debt Collection Practices Act. Johnny Quesenberry alleges that Asset Acceptance Capital Corp., Asset Acceptance LLC and Genesis Financial Solutions are misleading consumers into reactivating old debt, allowing the debt collectors to restart collection efforts on debts that were previously uncollectable because of their age or because they had already been discharged by bankruptcy.

Quesenberry's claim says the companies run a scam by offering credit cards or debt arbitration programs. They tell consumers that if they sign up for these programs or the Pearl Card Gold MasterCard, any debt they transfer to the program or card will be uncollectable. In fact, the agreement for the programs does allow collection actions. Furthermore, putting old debts on the card or into the program restarts the statute of limitations on the debt, which means debt that was previously too old or settled in another way can become active again. In this way, the companies can collect on debt that consumers don't actually owe. Quesenberry requested an injunction against the companies to stop this behavior, as well as unspecified financial damages and attorney fees. He proposes to include among the plaintiffs every Virginian who received such an offer.

As Colton abusive debt collection attorneys, we wish Quesenberry and his co-plaintiffs luck. This type of scam -- if his allegations are true -- takes advantage of consumers who don't understand how statutes of limitations on debt work. A statute of limitations is an expiration date, after which someone can no longer be sued. In the case of consumer debt, the consumer can no longer be successfully sued to collect a debt after the state's statute of limitations runs out. Collection agencies are free to request payment, but because they have no means of enforcement, consumers can ignore those requests. Unfortunately, if consumers do make another payment or take any other action with the account, even a promise to pay, they can restart the statute of limitations, meaning debt collectors are free to sue them. That's exactly what the Asset Acceptance companies are allegedly doing with this scheme -- enticing consumers with uncollectable dent into making it collectable again, ironically by promising them it will be uncollectable.

At Howard Law PC, we fight back against debt collection scams like this one by arming consumers with knowledge -- and, when appropriate, by suing dishonest debt collectors in a court of law. All Americans are protected by the FDCPA, a federal law that lays out the behaviors required and prohibited for collection agencies. Among other things, debt collectors are forbidden from using misrepresentation or deceit in order to collect on a debt, and may not seek amounts not justified by the law -- both issues in this case. Debt collectors also must verify the debt on request, cease most communications on request, limit how they communicate with the debtor and much more. Our Orange County deceptive debt collection lawyers help consumers whose rights and been violated sue the collection agency for financial damages, attorney fees and a court order to stop the law-breaking.

If you believe your rights were violated by a debt collector, you don't have to put up with it. Howard Law can help. To set up a free evaluation of your case, call us today at 1-800-872-5925 or send us a message online.