Ronald Canter, lead counsel in this particular case, also contributed to this post.
On May 9, 2014, the United States District Court for the District of Maryland in the case of Grant-Fletcher v. Collecto, Inc., d/b/a/ EOS CCA (Case No. 13-1505) handed the collection industry a major victory by rejecting an FDCPA class action suit filed on behalf of consumers in nineteen (19) states.
Luciena Grant-Fletcher, a repeat FDCPA Plaintiff, sued a third party collection agency for allegedly attempting to collect amounts not permitted by her cell phone service agreement with AT&T Wireless.
After Ms. Grant-Fletcher failed to pay her phone charges, AT&T sold the account to a third party debt purchaser, which in turn referred the defaulted account to the defendant collection agency, Collecto. Shortly thereafter, Grant-Fletcher filed a lawsuit claiming violations of the FDCPA.
Collecto responded to the suit by filing a motion to compel arbitration, contending that the terms of the Plaintiff’s contract with AT&T contained an enforceable Arbitration Clause. The agency argued that the arbitration provision which included AT&T’s “agents” and “assigns” as parties subject to the arbitration provision required the Court to reject the class action suit in favor of the binding arbitration.
The Court agreed, and relying on Fourth Circuit authority, held that even though Collecto did not sign the original contract, the arbitration provision inured to its benefit because the Plaintiff relied on the AT&T contract in alleging that the agency added late fees and interest not permitted by the AT&T contract. The Court ruling also required that the arbitration proceed on an individual basis in light of the class action waiver clause contained in the AT&T agreement.
This decision emphasizes the need for all industry members facing consumer protection claims to diligently scrutinize the contract documents creating the debt obligation and to consult with experienced defense counsel to determine if class action or individual consumer protection suits can be defeated on the basis of enforceable class action waivers and moved away from the Court system into the less expensive and time consuming arbitration process.
John Bedard (Bedard Law Group)is a nationally recognized authority on the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. He serves as counsel to several professional trade associations, including the Georgia Collectors Association. John is a former member of the Board of Directors of ACA International and is recognized by Collection Advisor magazine as one of the nation’s top 50 most influential people in the collection industry. His firm recently announced an Of Counsel relationship with The Law Offices of Ronald S. Canter.