A U.S. District Court Judge has dismissed a lawsuit against the Department of Education that was filed by a debtor who alleged the federal agency violated the Fair Debt Collection Practices Act and the Freedom of Information Act.
LaBonnie Copeland Allen filed the lawsuit in U.S. District Court for the District of Columbia in June pro se, or without legal representation. Allen claimed the department violated FDCPA rules in attempting to collect money she borrowed for her daughter’s education through the Parent Plus Loans program. Allen also claimed the department violated FIOA when it failed to respond to a letter requesting all information regarding the loans.
Specifically, Allen said the education department did not provide information regarding the balance of the loans or verification of the debt. She also claimed the department called her at work, a violation of the FDCPA.
Allen asked the court to “throw out” the amounts she owed or order that the balances be “drastically reduced.”
The lawsuit was filed against the education department, but it was for work being performed by one of its private collection agencies, an education department spokesman told insideARM.com.
Although unfamiliar with the case, Brian Davis, CEO of Coast Professional, Inc., told insideARM.com that he was not surprised at the outcome. Coast is one of 22 collection agencies under contract with the education department to collect on defaulted student loans. Davis also did not appear surprised that another lawsuit was filed alleging FDCPA violations.
“Wild FDCPA claims, as you know are on the rise and are becoming nearly epidemic,” Davis said.
Statistics show that more consumers are looking to have their debts dismissed or reduced alleging FDCPA or Fair Credit Act violations. So far this year 9,959 lawsuits claiming violations of the FDCPA have been filed, compared to 8,200 filed in all of 2009 (“Lawsuits Against Debt Collectors Drop in Second Half of November,” December 15).
Nonetheless, the ED spokesman noted, the education department takes all FDCPA violation claims seriously and investigates all complaints made against the agency and its contractors.
“We try to prevent people from going into default, and if they do, we really try to work with them to get them out of default,” he said.
In the case filed by Allen, Judge Rosemary M. Collyer dismissed all claims saying the court lacked the jurisdiction to act on the alleged FDCPA violations. Collyer also noted that while debt collectors who do not comply with FDCPA are subject to liability, the education department is not a debt collector and that the U.S. and all its agencies are immune from lawsuits unless immunity is waived.
“Congress did not waive sovereign immunity by enacting the FDCPA,” Collyer wrote.
Collyer also said the education department did not violate the FIOA because Allen did not allege she filed a formal request for documents, nor did the department have a record of one. Even if Allen had submitted a formal request, her claim would be moot because the department provided Allen with a payment history, which served as documentation for the amount owed, Collyer wrote.