Court Allows FDCPA Suit Where Assignment of Judgment Failed to List Current Balance of Debt

Ronald Canter

In a ruling bound to increase compliance concerns for purchasers of bad debts and collection law firms hired to enforce judgments against consumers, the United States Court of Appeals for the Fourth Circuit in Powell v. Palisades Acquisition XI, held that the filing of an assignment of judgment is a collection action subject to the Fair Debt Collection Practices Act (FDCPA).

The Circuit panel reversed a lower court decision dismissing a consumer’s lawsuit based on the reasoning that the filing of the assignment in the court where the judgment was entered was not an action to collect the debt. The appellate court rejected this analysis, explaining that “it would be incongruous…to hold that an assignment of judgment filed in a debt collection action is not similarly subject to the FDCPA, given that a debt collector who obtains a judgment…stands in exactly the same position as a debt collector who files an assignment of judgment. Both have the right to collect on their judgments.”