Judge Dismisses Lawsuit Against Department of ED Alleging FDCPA Violations

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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.

Continuing the Discussion

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  • avatar Manager says:

    Good job!!! Unbelievable that she would ask for verification of the debt!!!!! This needs to be a warning to ALL consumers that you need to do your own homework and don’t rely on information that you’re gathering from these websites out there. Think of the embarrassment that her daughter must feel now because her mom was attempting to be a deadbeat and not pay on the loan for an education. Talk about a tough lesson learned.

  • avatar Gurn Blanston says:

    Deadbeat? We see here why debt collectors are constantly being sued. It is just this kind of language that debt collectors seem unable to control that gets them sued.

    As for verifying the debt, why is it so unbelievable to you that she would ask for verification of the debt? That is her right, and it may well be that the debt was no valid as to interest, etc.

    Also, let’s be clear here. They only reason she lost is because Congress carved out an FDCPA exception for government debts.

    Finally, “So far this year 9,959 lawsuits claiming violations of the FDCPA have been filed, compared to 8,200 filed in all of 2009.” This merely establishes that debt collectors are being even more abusive. More lawsuits need to be filed, not fewer.

  • avatar Newport Queen says:

    1. She was provided with documentation regarding the amount owed & 2. Calling someone at work is not an FDCPA violation unless Allen specifically told them she could not recieve calls at work. So kudos to the Judge for dismissing what seems to be yet another attempt of a debtor to get out of paying their debt.

    “So far this year 9,959 lawsuits claiming violations of the FDCPA have been filed, compared to 8,200 filed in all of 2009.” The rise in lawsuits is not due to more abusive practice but due to the increase in consumers who are in over their head believing the hype they read on the net about how they can avoid paying their debt.

  • avatar Manager says:

    Gurn, yes she IS a deadbeat!!! She was PAYING on the loan and then decided to stop because she probably got some poor advice on how to dodge her debt from somebody like you!! Where on earth did this lady think the money was coming from for HER daughters education??? Oh, she conveniently forgot right? So they should have to verify that SHE took the loan out for her daughters education. Sorry, in my book, that makes you a deadbeat. Newport Queen couldn’t have summed it up better.

    Allen asked the court to “throw out” the amounts she owed or order that the balances be “drastically reduced.”

    Those statements alone make her a deadbeat my friend. As if society should just GIVE her daughter a free college education??? All because she didn’t agree with the amounts?? Really?? Really Mrs Allen?? Loser deadbeat!!!!!

  • avatar Steve Kee says:

    It is most unfortunate that of all the lessons that could be learned from this lawsuit, civility is not one. I agree that the consumer may have thought this was a way to avoid this obligation. That notwithstanding, the attack on her character and suggestions that you are positive of her intent are just not warranted.

  • avatar Manager says:

    Say what you wish Steve, this debtor tried to do what just about every debtor does: DODGE THEIR OBLIGATIONS IN THE NAME OF FDCPA VIOLATIONS!!!! She needs to be made an example of for all who owe debts. If you owe it, shut up and pay it. If you don’t owe it, then by all means, explore every legal avenue you can. Unbelievable that she would act like she didn’t know what the debt was for. Obsurd actually because she WAS PAYING on it!! Then to have the gall to ask for the amounts to be thrown out or drastically reduced?? Maybe after I fill up my gas tank at $3 a gallon, I can go inside to the clerk and demand that I be refunded all of my money or have my total gas purchase drastically reduced because I don’t agree with having to pay $3 a gallon. Every name this woman is called is warranted!! And yes she is made of poor character. Honest people pay their debts back. Only a deadbeat would pull the type of stunt she tried.

  • avatar Expert says:

    All that Ms. LaBonnie Copeland Allen and her daughter need to do is file a new lawsuit against the collection agency if they refused to validate the debt and they have sufficient documentation to support their claim i.e. certified mail, copy of letter sent, and if the colelction agency failed to respond to the request…oh well!

    If the collection agency called them at work….then the FDCPA has specific requirements to pursue a claim in court.

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