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Federal Court Decides Case Regarding Capital One Collections

A Federal District Court within the Ninth Circuit Court of Appeals (whose jurisdiction includes federal courts in California) has held that a consumer failed to adequately plead that Capital One Services, LLC was a debt collector required to comply with the Fair Debt Collection Practices Act. Pitner v. Capital One Services, LLC and Northland Group, 2012 U.S. Dist. LEXIS 9180 (W.D. WA, January 26, 2012).

The husband and wife claimed that Capital One continued to contact them even after they informed the bank they were represented by a lawyer (and thus Capital One should contact the lawyer and leave the couple alone).

It has been reported that Capital One is very aggressive in its attempts to collect debts from consumers, even attempting to chase them after the consumer had filed bankruptcy!

See this report on Youtube.

So, on September 15, 2011, Michael and Colleen Pitner (the"Pitners") filed a lawsuit complaint in a Washington State court against Capital One Services, LLC and the collection agency, Northland Group, Inc. The Pitners alleged the companies violated federal Fair Debt Collections Practices Act("FDCPA"), 15 U.S.C. § 1692 et seq.; the Washington Collection Agency Act, and the Washington Consumer Protection Act ("CPA"). Id. On October14, 2011, the defendants had the case removed to federal court and sought to have it thrown out.

The Court analyzed the federal FDCPA and stated:

'The FDCPA was enacted as a broad remedial statute designed to

"eliminate abusive debt collection practices by debt collectors . . . ."

15 U.S.C. § 1692e. The FDCPA comprehensively regulates the

conduct of debt collectors, imposing affirmative obligations and

broadly prohibiting abusive practices. See, e.g., 15 U.S.C. §§ 1692b

(governing the acquisition of location information), 1692e (prohibiting

misleading or deceptive practices). The FDCPA contains a specific

exemption for affiliated entities:

the term "debt collector". . . does not include . . . any

person while acting as a debt collector for another person,

both of whom are related by common ownership or

affiliated by corporate control, if the person acting as a

debt collector does so only for persons to whom it is so

related or affiliated and if the principal business of such

person is not the collection of debts.

citing 15 U.S.C. §1692a(6)(B).

Capital One basically argues that since it was an original creditor, and not a collection agency attempting to collect the debt for someone else, it was immune from the federal FDCPA. The Court threw out the consumer's claims, noting that the consumers failed to even allege that the defendants what was necessary to prove Capital One was a debt collector under federal law.

However, creditors like Capital One should be careful when collecting debts in states such as California, where the California Fair Debt Collection Practices Act does apply to banks and original creditors when they are collecting their own debts. Thus, in California banks and creditors are not immune from consumer protection laws that prevent debt collectors, banks and creditors from abusing, harassing, or misleading consumers.

Our San Jose law office protects consumers from being harassed by debt collectors. We are investigating claims against Capital One for allegedly violating the California Fair Debt Collection Practices Acts.

If you are being contacted by Capital One or any other creditors or debt collectors, give us a call at 408-296-0400.