Appellate Court Affirms that FDCPA Does Not Cover Creditors

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The U.S. Court Of Appeals for the Eleventh Circuit ruled last week in a case involving Citigroup that the Fair Debt Collection Practices Act (FDCPA) does not apply to creditors, as everyone in the ARM industry already knows.

What’s concerning about the case is the amount of time and money the bank was forced to spend in a case that was appealed up to lofty legal levels. To add insult to injury, the case was brought by the consumer pro se.

The case, Goia v. CitiFinancial Auto Corp., arose from a 2007 automobile purchase that went sideways. Goia did not feel he was responsible for damage insurance payments taken on by Citi – who financed the car purchase – despite the insurance provision in the contract. Citi eventually tried to collect the payments.

Goia claimed that Citi harassed him in the attempts to collect the debt and that it was liable under the FDCPA. Both the lower court and the appellate court rejected that claim, noting that the statute applies only to third party collectors, not creditors collecting on their own behalf.

As a possible explanation for how the suit got all the way to the federal circuit court, Goia threw a lot of accusations at Citi: in addition to the FDCPA claims, he even accused the government of being liable for a civil rights claim because the United States owned shares of Citi stock.

Still, a baseless pro se FDCPA case was allowed to advance all the way to the circuit court level, a troubling development for any ARM company defending such claims.


Continuing the Discussion

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  • avatar LindaP says:

    Sounds to me like he has a case, he just needs a good lawyer.

  • avatar jessie-gomez says:

    It look like a consumer trying to scam Citi.

  • avatar Commercial Guy says:

    He had no case at all; the statute is very clear on that point. I rather seriously doubt that a lawyer would have taken this case, at least this far; in fact probably not as far as the initial filing. It has been my experience that most judges have a profound dislike of attorneys wasting the judge’s time. This is a classic example of the consumer pro se litigant filing a frivolous lawsuit, most likely with the thought that the creditor would rather settle than push this to the rightful decision.

    Good job, Citi…wow, did I really just say that?

  • avatar jessie-gomez says:

    Citi should go after that low life deadbeat consumer.

  • avatar Linda Almonte says:

    There are a lot of missing facts here. Number one were all collections attempts made by Citi employees being the first and foremost. Then what stage of the collections process was the account in? Many firms believe they are protected by “original creditor” because they are litigating in the name of the original creditor. When in reality if the account was placed with an attorney network then they placed with a firm it is out the window along with the attorney/client privl. since in most cases the attorney/client contract is between the attorney firm and third party with no actual communication with the original creditor or bank.
    As far as the insurance potion I have seen too many cases where there were significant defects in what was on the books and what the customer signed up for without question. So definitely one worth taking a second look at and not making assumptions.

  • avatar Commercial Guy says:

    Valid points, Linda, but the article indicates that the only defendants were Citi and the Federal Government, as a shareholder of Citi. I think we can probably conclude from this that the collection activity was solely by the original creditor; if the plaintiff included the Federal Government, it is likely he would have included everyone else he could think of. And while there may very well have been defects in the actual insurance portion of the contract, this suit had nothing to do with that; this was simply a pro se case under the FDCPA for alleged violations of that statute.

  • avatar James Green says:

    How do nay of you know this is not a debt purchased by a third party debt collector posing as Citi?
    Most “boiler plate” debt purchase agreements allow for the purchaser to pose as original creditor and require the seller to supply matterials to do so.

  • avatar jessie-gomez says:

    Linda, are you upset because the consumer got caught trying to scam Citi?

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