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Repossessors & The Fair Debt Collection Laws

A repossessor who takes – or attempts to take – property in breach of the peace (e.g., by force or by illegally entering a locked garage) can be sued for violations of the fair debt collection laws. In fact, the repossessor can be sued under both the federal Fair Debt Collection Practices Act and the California Rosenthal Fair Debt Collection Practices Act.

The federal Fair Debt Collection Practices Act generally does not apply to repossessors. However, it does apply to repossessors if they take or threaten to take any nonjudicial action (i.e, without a court order) to repossess property when there is no present right to possession of the property. A nonjudicial repossession of property cannot be accomplished in breach of the peace. Thus, if there is a breach of the peace, the repossessor loses the right to possession of the property and any actions taken to repossess the property will violate the federal Fair Debt Collection Practices Act.

A violation of the federal Fair Debt Collection Practices Act by a repossessor automatically is a violation of  California’s Rosenthal Fair Debt Collection Practices Act. This is so because California’s Rosenthal Act incorporates most of the provisions of the federal Fair Debt Collection Practices Act and makes them independent violations of the Rosenthal Act. But that’s not all…the entirety of California’s Rosenthal Fair Debt Collection Practices Act covers repossessors. That means that a consumer may be able to sue the repossessor not only for taking the property without a present right to do so, but also for other violations of the federal Fair Debt Collection Practices Act and the Rosenthal Act.

Why is all of this important? There are two reasons. First, the federal and California fair debt collection laws entitle a winning plaintiff to collect statutory penalties up to $1,000 from the defendant. These amounts will be in addition to any actual damages a consumer can collect for, among other things, lost or damaged property and emotional distress. Second, the fair debt collection laws entitle a winning plaintiff to collect his or her attorneys’ fees. This means that an attorney can take the consumer’s case on a contingency basis, with hopes of collecting fees at the conclusion of the case.

My firm routinely pursues claims on behalf of consumers when repossession agencies take or attempt to take property in violation of law. Please feel free to contact us with any questions or issues.

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