Judge Rules for Collectors in Unauthorized Charge FDCPA Case

A Chicago law firm announced recently that it has won a case on behalf of an ARM industry client that was accused of violating the Fair Debt Collection Practices Act (FDCPA) in a class action lawsuit.

Nicole Strickler, associate at Messer & Stilp, Ltd, obtained the victory after a bench trial in the case of Kasalo v. NCSPLUS and Gary Cooke. The lawsuit was filed as a class action under the FDCPA. (The decisions can be found at 2011 U.S. Dist. LEXIS 114480.)

In summary, NCSPLUS sent a collection letter stating that the amount of the Plaintiff’s debt as $1,020.03. The Plaintiff argued that the amount of the debt was inflated from the original balance without justification as his original balance was only $88.00. Neither side was in possession of a detailed history of the charges on the account. As such, there was no evidence showing that the charges brought were authorized or unauthorized.

Plaintiff brought suit, in part, alleging a violation of 1692e and f(1) of the FDCPA. Plaintiff consistently argued that it was the burden of the Defendants to provide proof that the charges added to the account were authorized. The Judge specifically noted that Plaintiff confused his burden of proof, ruling that it was the Plaintiff’s burden to prove the charges were unauthorized and not up to the Defendants to justify the amount charged to avoid liability. As such, the Court entered judgment in favor of Defendants on all counts. The order can be read here.

As an aside, the Court ruled as a matter of first impression that a debt collector is not liable under 1692f(1) unless the debt collector itself adds the unauthorized charges to the account. Thus if a creditor is the party that adds unauthorized charges, the debt collector avoids liability.

Messer & Stilp pointed out that the Plaintiff, Tommy Kasalo, is the brother of FDCPA plaintiff attorney and frequent filer, Mario Kris Kasalo.

The law firm also thanked both NCSPLUS and Gary Cooke, who stuck this case out and fought the good fight, achieving another victory for the ARM industry.