Alabama Case Filings – LVNV Sued For FDCPA Violations After Suing A Consumer Who Had Paid The Debt Off

by

We have warned consumers to be very careful about settling debts as sometimes debt collectors will come after you even after you have settled your case.

Here is an example of a lawsuit against the well known debt collector (debt buyer) LVNV and Leading Edge Recovery Solutions, LLC, related to allegations that the consumer settled the debt but yet LVNV then sued the consumer. LVNV refused to dismiss the case with prejudice but when the trial came, LVNV did not show up to court according to the judge’s order.

Here are the allegations if you are interested in reading:

COMPLAINT

COMES NOW the Plaintiff, by and through counsel, in the above styled cause, and for Plaintiff’s Complaint against the Defendants state as follows:
1. This action arises out of Defendant LVNV’s repeated violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA “), and out of state law violations and out of the invasions of Plaintiff’s personal and financial privacy by all of the Defendants and their agents in their illegal efforts to collect a consumer debt from Plaintiff.
2. Debt collectors are abusing Alabama consumers at an astonishing rate and are doing so as they believe few consumers know their rights or will act upon their rights so the economic gain far outweighs any perceived danger of a lawsuit or verdict.
3. Congress found it necessary to pass the FDCPA due to rampant abusive practices by dishonorable debt collectors. 15 USC § 1692 is entitled “Congressional findings and declaration of purpose” and it states as follows:
(a) There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.
(b) Existing laws and procedures for redressing these injuries are inadequate to protect consumers.
(c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts.
(d) Abusive debt collection practices are carried on to a sub¬stantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate com-merce.
(e) It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt col¬lection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.

[Emphasis added].

PARTIES

4. Plaintiff is a natural person who is a resident of Alabama, and is a “consumer” as that term is defined by 15 U.S.C. § 1692a(3).
5. Defendant LVNV Funding, LLC, (“Defendant” or “LVNV “) is a foreign debt collection firm that engages in the business of debt collection. It conducts business in Alabama. Its principal place of business is in the State of Nevada and it is incorporated in Delaware.
6. Defendant Leading Edge Recovery Solutions, LLC., (“Defendant” or “Leading Edge”) is a foreign debt collection firm that engages in the business of debt collection. It conducts business in Alabama. Its principal place of business is in the State of Illinois and it is incorporated in Illinois.

Factual Allegations

7. Plaintiff settled his alleged LVNV debt with LVNV and LERS in March 2008 by paying $5,144.77 on an alleged debt of $7,349.63, which resulted in a zero balance being owed.
8. Defendant LVNV started (within the last 12 months) calling Plaintiff to collect this non-existent debt after Plaintiff settled the debt with Defendant.
9. Plaintiff pointed out to Defendant LVNV that he paid the debt and Defendant LVNV refused to stop collection activities.
10. Instead, with full knowledge that Plaintiff owed Defendant LVNV no money, Defendant LVNV sued Plaintiff, for the approximate difference between the amount claimed to be owed and the amount Plaintiff paid Defendants in March 2008.
11. In this suit, Defendant LVNV asserted it was the owner of a certain debt allegedly owed by Plaintiff.
12. In Plaintiff’s Answer, Plaintiff produced a copy of the settlement collection letter by Defendants and the cancelled settlement check to the Court and the Defendant LVNV.
13. In Plaintiff’s Answer to the collection suit, Plaintiff stated “I would like for this company [LVNV] to do what they said they would do as I have already done.”
14. The collection letter from 2008 stated if the settlement amount was paid, “we will consider the account SETTLED IN FULL.”
15. An honorable debt collector would have immediately dismissed the case with prejudice.
16. Defendant LVNV refused to dismiss the lawsuit.
17. Defendant LVNV is not an honorable debt collector.
18. Defendant LVNV waited until immediately before trial to take any action – this was an attempt to take Plaintiff’s money when Plaintiff owed no money to Defendant LVNV.
19. Defendant LVNV, realizing it had been caught, tried to dismiss the lawsuit the Friday before trial. The motion to dismiss the lawsuit requested that the dismissal be without prejudice as the Defendant LVNV intended to be able to sue the Plaintiff in the future or to sell or assign the debt to a collector who would then collect against Plaintiff. The Motion is dated April 27, 2010, but it is stamped filed on June 11, 2010, over 30 days after Defendant had been caught filing this bogus suit.
20. Plaintiff had to hire legal counsel.
21. The Court denied the “motion to dismiss without prejudice” on June 11, 2010.
22. Showing a complete disrespect to the Plaintiff and to the Court, Defendant LVNV and/or Defendant LVNV’s counsel did not even show up for the trial in the bogus and frivolous suit it brought against Plaintiff.
23. The Judge entered an Order dismissing the case with prejudice on June 15, 2010. The Order states “Dismissed with prejudice. Plaintiff [LVNV] failed to appear.” [Emphasis added].
24. The Defendant LVNV filed and continued to prosecute the case without any reasonable basis to do so.
25. The case against Plaintiff was brought with malice against Plaintiff.
26. Defendant LVNV has falsely reported to the credit reporting agencies that Plaintiff owed it money.
27. This was done in order to extort money out of Plaintiff.
28. Defendant LVNV assigned the alleged debt to Defendant LERS at some point prior to March 2008.
29. Defendant LERS only took collection actions authorized by Defendant LVNV and only engaged in authorized collection activities authorized by Defendant LVNV against Plaintiff .
30. All of the activities of Defendant LERS were taken in the line and scope of its agency relationship with Defendant LVNV.
31. Defendant LERS sent a collection letter to Plaintiff in early 2008 making the representation that if Plaintiff paid $5,144.74, that the account would be settled in full and that the credit report agencies would be informed of this.
32. This collection letter was fraudulent as Defendants LVNV and LERS had no intention of considering the account settled in full and Defendant LVNV had no intention of informing the credit reporting agencies that the account was settled in full.
33. One intention of the Defendants LVNV and LERS was to deceive Plaintiff into paying $5,144.74 by promising that this payment would close the account.
34. The Defendants LVNV and LERS intended that after the payment of the $5,144.74 that either Defendants LVNV and LERS jointly or separately would continue collection activities against Plaintiff.
35. Some of these collection activities would include:
• Collection calls;
• False credit reporting that a balance was still owed and that the account had not been settled in full; and • Filing of a lawsuit.
36. Defendant LVNV took some or all of the actions listed above and may have engaged in other collection activities against Plaintiff that Plaintiff is not aware of at this time.
37. Defendants LVNV and LERS suppressed the truth from Plaintiff in that Defendants LVNV and LERS did not reveal that the settlement offer was fraudulent and that Defendants either separately or jointly would continue to engage in collection activities against Plaintiff.
38. Defendants LVNV and LERS had an obligation and a duty to speak the truth as Defendants LVNV and LERS are not allowed to make statements which do not contain the full truth.
39. Plaintiff believed the Defendants LVNV and LERS and reasonably and justifiably relied upon the misrepresentations and suppressions of material facts.
40. Plaintiff has been damaged by the misrepresentations and suppressions of material facts by Defendants LVNV and LERS in that Plaintiff paid $5,144.74 on a debt which is highly likely Plaintiff did not even owe, but regardless of that fact, Plaintiff paid this money and yet was subjected to the reprehensible abusive collection activities of the Defendants LVNV and LERS including false credit reporting and being sued by Defendant LVNV.
41. Plaintiff just discovered the fraud when Defendant LVNV, in the last 12 months, began collection activities against Plaintiff.
42. Defendants LVNV and LERS misconduct caused damage to the Plaintiff.
43. The Defendants LVNV and LERS misconduct was designed to harm the Plaintiff as Defendants LVNV and LERS acted with full knowledge of the damage this type of misconduct will cause.
44. Defendants LVNV and LERS were successful in their plan, scheme, design, and did in fact cause severe damages to Plaintiff.

SUMMARY

45. All of the above-described collection communications made to Plaintiff by Defendant LVNV and collection agents of Defendant LVNV were made in violation of the FDCPA, including (but not limited to) §1692d, §1692e (including (2), (5), (8), (10)), §1692f (including (1)).
46. The above-detailed conduct by these Defendants LVNV and LERS of harassing Plaintiff in an effort to collect this debt was also an invasion of Plaintiff’s privacy by an intrusion upon seclusion and resulted in actual damages to the Plaintiff.
47. This series of abusive collection actions by Defendants LVNV and LERS and their agents caused Plaintiff stress and anguish as a result of these abusive calls.
48. Defendants LVNV and LERS attempts to collect this debt from Plaintiff and refusal to stop violating the law is an invasion of Plaintiff’s privacy and Plaintiff’s right to be left alone.
49. Plaintiff has suffered actual damages as a result of these illegal collection communications by these Defendants LVNV and LERS in the form of anger, anxiety, emotional distress, fear, frustration, upset, humiliation, embarrassment, amongst other negative emotions, as well as suffering from unjustified and abusive invasions of personal privacy.
50. The only way that abusive debt collectors like Defendants LVNV and LERS will stop their abusive practices towards consumers is by a jury verdict fully compensating Plaintiffs for the harm done to Plaintiffs and by a punitive damage award in excess of $750,000.
51. A punitive damage award in excess of $750,000 will get the attention of Defendants LVNV and LERS and other abusive debt collectors so that they will realize that it no longer makes economic sense to abuse consumers in Alabama and to gain an unfair competitive advantage over honorable, law abiding collectors.
52. A full compensatory damage award and a full punitive damage award will accomplish the goals of Congress in passing the FDCPA – stop abusive collection practices against consumers and prevent dishonorable debt collectors from having an unfair advantage over collectors that operate within the boundaries of the law.

NEGLIGENT AND WANTON HIRING AND SUPERVISION

53. Defendants LVNV and LERS negligently and/or wantonly hired, retained, or supervised incompetent debt collectors and are thereby responsible to the Plaintiff for the wrongs committed against Plaintiff and the damages suffered by Plaintiff.

CAUSES OF ACTION
COUNT I. (LVNV ONLY)
VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT 15 U.S.C. § 1692 et seq.

54. Plaintiff incorporates by reference all of the above paragraphs of this Complaint as though fully stated herein.
55. The acts and omissions of Defendant LVNV and its agents constitute numerous and multiple violations of the FDCPA with respect to the Plaintiff.
56. As a result of Defendant LVNV’s violations of the FDCPA, Plaintiff is entitled to actual damages pursuant to 15 U.S.C. § 1692k(a)(1); statutory damages in an amount up to $1,000.00 pursuant to 15 U.S.C. § 1692k(a)(2)(A); (2) actual and compensatory damages; and, (3) reasonable attorney’s fees and costs pursuant to 15 U.S.C. § 1692k(a)(3), from Defendant LVNV.

COUNT II. (ALL DEFENDANTS)
INVASION OF PRIVACY BY INTRUSION UPON SECLUSION

57. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
58. Alabama law recognizes Plaintiff’s right to be free from invasions of privacy and Defendants violated Alabama state law as described in this Complaint.
59. Congress explicitly recognized a consumer’s inherent right to privacy in collection matters in passing the Fair Debt Collection Practices Act, when it stated as part of its findings:
Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.

15 U.S.C. § 1692(a) (emphasis added).
60. Congress further recognized a consumer’s right to privacy in financial data in passing the Gramm Leech Bliley Act, which regulates the privacy of consumer financial data for a broad range of “financial institutions” including debt collectors (albeit without a private right of action), when it stated as part of its purposes:
It is the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers’ nonpublic personal information.

15 U.S.C. § 6801(a) (emphasis added).
61. Defendants and/or their agents intentionally, recklessly, and/or negligently interfered, physically or otherwise, with the solitude, seclusion and or private concerns or affairs of the Plaintiff, namely, by repeatedly and unlawfully attempting to collect a debt and thereby invaded Plaintiff’s privacy.
62. Defendants and their agents intentionally, recklessly, and/or negligently caused emotional harm to Plaintiff by engaging in highly offensive conduct in the course of collecting this debt, thereby invading and intruding upon Plaintiff’s right to privacy.
63. Plaintiff had a reasonable expectation of privacy in Plaintiff’s solitude, seclusion, private concerns or affairs, and private financial information.
64. The conduct of these Defendants and their agents, in engaging in the above-described illegal collection conduct against Plaintiff, resulted in multiple intrusions and invasions of privacy by these Defendants which occurred in a way that would be highly offensive to a reasonable person in that position.
65. As a result of such intrusions and invasions of privacy, Plaintiff is entitled to actual damages in an amount to be determined at trial from Defendants.
66. All acts of Defendants and their agents and/or employees were committed with malice, intent, wantonness, and/or recklessness and as such Defendants are subject to punitive damages.

COUNT III. (ALL DEFENDANTS)
NEGLIGENT, WANTON, AND/OR INTENTIONAL HIRING AND
SUPERVISION OF INCOMPETENT DEBT COLLECTORS

67. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
68. Defendants’ collectors are allowed and encouraged to break the law in order to collect debts.
69. Defendants are aware of the wrongful conduct of their collectors.
70. Defendants negligently, wantonly, and/or intentionally hired, retained, or supervised incompetent debt collectors, who were allowed or encouraged to violate the law as was done to Plaintiff, and Defendants are thereby responsible to the Plaintiff for the wrongs committed against Plaintiff and the damages suffered by Plaintiff.

COUNT IV (ALL DEFENDANTS)
NEGLIGENT, WANTON, AND INTENTIONAL CONDUCT

71. All paragraphs of this Complaint are expressly adopted and incorporated herein as if fully set forth herein.
72. Defendants acted with negligence, malice, wantonness, recklessness, and/or intentional conduct in their dealings with and about Plaintiff as set forth in this Complaint.
73. Defendants violated all of the duties Defendants had and such violations were made intentionally, willfully, recklessly, maliciously, wantonly, and negligently.
74. It was foreseeable, and Defendants did in fact foresee it, the actions of the Defendants would lead and did lead to the exact type of harm suffered by Plaintiff.
75. Defendants acted with negligence, malice, wantonness, recklessness, and/or intentional conduct in their dealings with and about Plaintiff as set forth in this Complaint.
76. Defendants invaded the privacy of Plaintiff as set forth in Alabama law.
77. Such negligence, malice, wantonness, recklessness, willfulness, and/or intentional conduct proximately caused the damages set forth in this complaint.
78. As a result of this conduct, action, and inaction of Defendants, Plaintiff has suffered damages as set forth in this Complaint.

COUNT V (LVNV ONLY)
MALICIOUS PROSECUTION AND ABUSE OF PROCESS AGAINST DEFENDANT

79. All paragraphs of this Complaint are expressly adopted and incorporated herein as if fully set forth herein.
80. Defendant LVNV instituted and continued prosecuting the lawsuit against Plaintiff with no reasonable basis to do so.
81. Defendant LVNV instituted and continued prosecuting the lawsuit against Plaintiff with malice and with the design and plan that the lawsuit would result in an illegal judgment against the Plaintiff or would cause Plaintiff to pay Defendant LVNV money on a non-existent debt.
82. The malicious plan of Defendant LVNV included the knowledge that the fraudulent judgment would be devastating to Plaintiff’s credit report and credit scores and would lead to garnishments and the Defendant LVNV tried to accomplish this by the Defendant LVNV’s malicious and abusive actions.
83. Throughout the entire illegal lawsuit against Plaintiff, Defendant LVNV knew at all times that there was no basis for the lawsuit and the intent and design of filing the lawsuit and continuing to prosecute the lawsuit was to extort money from the Plaintiff which Defendant LVNV knew it was not entitled to receive.
84. The litigation against Plaintiff filed by Defendant LVNV eventually resulted in an adjudication in favor of Plaintiff after Defendant LVNV realized that its illegal scheme and plan had unraveled in that it had been caught, so much so that Defendant LVNV first tried to dismiss the case without prejudice and then refused to even show up for trial.
85. The illegal and improper actions of the Defendant LVNV constitute malicious prosecution and abuse of process.
86. The Plaintiff suffered past and future emotional distress and monetary loss as a direct and proximate result of Defendant LVNV’s abuse of process and malicious prosecution.

COUNT VI (ALL DEFENDANTS)
FRAUD

87. All paragraphs of this Complaint are expressly adopted and incorporated herein as if fully set forth herein.
88. Defendant LERS only took collection actions authorized by Defendant LVNV and only engaged in collection activities authorized by Defendant LVNV against Plaintiff.
89. All of the activities of Defendant LERS were taken in the line and scope of its agency relationship with Defendant LVNV.
90. Defendant LERS sent a collection letter to Plaintiff in early 2008 making the representation that if Plaintiff paid $5,144.74, that the account would be settled in full and that the credit report agencies would be informed of this.
91. This collection letter was fraudulent as Defendants LVNV and LERS had no intention of considering the account settled in full and Defendant LVNV had no intention of informing the credit reporting agencies that the account was settled in full.
92. One intention of the Defendants LVNV and LERS was to deceive Plaintiff into paying $5,144.74 by promising that this payment would close the account.
93. The Defendants LVNV and LERS intended that after the payment of the $5,144.74 that either Defendants LVNV and LERS jointly or separately would continue collection activities against Plaintiff.
94. Some of these collection activities would include:
• Collection calls;
• False credit reporting that a balance was still owed and that the account had not been settled in full; and • Filing of a lawsuit.
95. Defendant LVNV took some or all of the actions listed above and may have engaged in other collection activities against Plaintiff that Plaintiff is not aware of at this time.
96. Defendants LVNV and LERS suppressed the truth from Plaintiff in that Defendants LVNV and LERS did not reveal that the settlement offer was fraudulent and that Defendants either separately or jointly would continue to engage in collection activities against Plaintiff.
97. Defendants LVNV and LERS had an obligation and a duty to speak the truth as Defendants LVNV and LERS are not allowed to make statements which do not contain the full truth.
98. Plaintiff believed the Defendants LVNV and LERS and reasonably and justifiably relied upon the misrepresentations and suppressions of material facts.
99. Plaintiff has been damaged by the misrepresentations and suppressions of material facts by Defendants LVNV and LERS in that Plaintiff paid $5,144.74 on a debt which is highly likely Plaintiff did not even owe, but regardless of that fact, Plaintiff paid this money and yet was subjected to the reprehensible abusive collection activities of the Defendants LVNV and LERS including false credit reporting and being sued by Defendant LVNV.
100. Defendants committed the misrepresentation and suppressions of material facts intentionally, willfully, recklessly, wantonly, negligently, and/or innocently.
101. Plaintiff just discovered the fraud when Defendant LVNV, in the last 12 months, began collection activities against Plaintiff.
102. The misconduct of Defendants caused Plaintiff injuries and damages.

PRAYER FOR RELIEF
WHEREFORE, Plaintiff prays that judgment be entered against Defendants LVNV and LERS:

COUNT I. (LVNV ONLY)
VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT 15 U.S.C. § 1692 et seq.

• for an award of actual damages pursuant to 15 U.S.C. § 1692k(a)(1) against Defendant LVNV;
• for an award of statutory damages of $1,000.00 pursuant to 15 U.S.C. §1692k(a)(2)(A) against Defendant LVNV;
• for an award of costs of litigation and reasonable attorney’s fees pursuant to 15 U.S.C. § 1692k(a)(3) against Defendant LVNV.
• for such other and further relief as may be just and proper.

COUNT II. (ALL DEFENDANTS)
INVASION OF PRIVACY BY INTRUSION UPON SECLUSION

• for an award of actual damages from Defendants for the all damages including emotional distress suffered as a result of the intentional, reckless, and/or negligent FDCPA violations and intentional, reckless, and/or negligent invasions of privacy in an amount to be determined at trial for Plaintiff;
• punitive damage; and • for such other and further relief as may be just and proper.

COUNT III. (ALL DEFENDANTS)
NEGLIGENT, WANTON, AND/OR INTENTIONAL HIRING AND
SUPERVISION OF INCOMPETENT DEBT COLLECTORS
• for an award of actual damages from Defendants for the all damages including emotional distress suffered as a result of the intentional, reckless, and/or negligent violations and intentional, reckless, and/or negligent hiring and supervision of incompetent debt collectors in an amount to be determined at trial for Plaintiff;
• punitive damage; and • for such other and further relief as may be just and proper.

COUNT IV. (ALL DEFENDANTS)
NEGLIGENT, WANTON, AND INTENTIONAL CONDUCT
• for an award of actual damages from Defendants for the all damages including emotional distress suffered as a result of the intentional, reckless, and/or negligent violations of state law in an amount to be determined at trial for Plaintiff;
• punitive damages; and • for such other and further relief as may be just and proper.

COUNT V (LVNV ONLY)
MALICIOUS PROSECUTION AND ABUSE OF PROCESS AGAINST DEFENDANT
• for an award of actual damages from Defendant LVNV for the all damages including emotional distress suffered as a result of the intentional, reckless, and/or wrongful violations of state law in an amount to be determined at trial for Plaintiff;
• punitive damages; and • for such other and further relief as may be just and proper.

COUNT VI (ALL DEFENDANTS)
FRAUD
• for an award of actual damages from Defendants for the all damages including emotional distress suffered as a result of the intentional, reckless, and/or wrongful violations of state law in an amount to be determined at trial for Plaintiff;
• punitive damages; and • for such other and further relief as may be just and proper.
Respectfully Submitted,

/s/ John G. Watts
John G. Watts (WAT056)

Attorney for Plaintiff OF COUNSEL:
WATTS LAW GROUP, PC The Kress Building 301 19th Street North Birmingham, Alabama 35203 (205) 879-2447 (888) 522-7167 facsimile john@wattslawgroup.com
/s/ M. Stan Herring
M. Stan Herring (HER037)
Attorney for Plaintiff
OF COUNSEL:
M. STAN HERRING, P.C.
The Kress Building 301 19th Street North Birmingham, Alabama 35203 (205) 714-4443 (888) 522-7167 facsimile msh@mstanherringlaw.com

PLAINTIFF DEMANDS A TRIAL BY JURY IN THIS CAUSE.

/s/ John G. Watts
Attorney for Plaintiff
Serve defendants via certified mail at the following address:

LVNV Funding, LLC c/o CT Corporation System 2 North Jackson St., Suite 605 Montgomery, Alabama 36104
Leading Edge Recovery Solutions, LLC c/o CT Corporation System 2 North Jackson St., Suite 605 Montgomery, Alabama 36104
Here is a video discussing the dangers of settling with debt collectors:

 

 

Contact Information