Many repossession companies have been sued for allegedly violating people’s rights during repossessions, including on tribal land. If a repossession company violated the Fair Debt Collection Practices Act (“FDCPA”), then pursuant to that federal statute, it would have to pay the consumer compensation of up to $1,000 in statutory damages, and have to cover their legal fees and any costs
In the United States District Court for the District of Minnesota, a federal lawsuit was filed against a creditor, two repossession companies, and a repossession agent. The repossession companies and the agent were sued for alleged violations of the FDCPA and all defendants were sued for alleged violations of Minnesota state law. The docket number for this case is Case No. 0:16-cv-00422-JRT-LIB.
The plaintiff alleged that she took out a loan with the creditor in order to finance the purchase of her vehicle and that by doing so, she granted the creditor a security interest in her vehicle. She alleged that when she began to fall behind on payments, the creditor hired a repossession company who then subcontracted a second repossession company to repossess her vehicle. The plaintiff also alleged that she lived at her mother’s house at the time of the repossession, which was located on an Indian reservation. The plaintiff alleged that the tribal land was governed by its own laws and that according to the reservation’s ordinance, a secured party could only repossess collateral on the reservation if they had the debtor’s written consent or a judicial order.
The plaintiff alleged that in April 2015, the repossession company and its agent entered the reservation in order to conduct the repossession. She alleged that they went to her mother’s house and after finding the vehicle parked in the driveway, they unlawfully repossessed it. The plaintiff alleged that the next morning, she woke up and realized that her vehicle was missing. After, she alleged that she reported the missing vehicle to the reservation’s police department who informed her that the repossession company told them that the creditor had authorized the repossession. The plaintiff also alleged that the repossession company left a phone number for her to call with the police, and that she called this number many times in order to try to find out where the vehicle was and how she could reclaim it.
The plaintiff alleged that the repossession company did not provide her with the opportunity to recover her personal items, like medical supplies and birthday gifts, that were inside of the repossessed vehicle. Additionally, she alleged that as a result of the repossession, she was left without a vehicle and could not transport her nephew to his medical appointments. The plaintiff alleged that the repossession companies violated the FDCPA, and that the repossession of her vehicle was unlawful because the defendants did not have the present right to repossess the vehicle since it was located on the reservation. The plaintiff alleged that the defendants unlawfully entered tribal land to conduct the repossession and did not abide by laws that governed the reservation, thus removing their right to repossession.
In the United States District Court for the Northern District of Illinois in the Eastern Division, a class action lawsuit was filed against two repossession companies and a creditor. The repossession companies were sued for alleged violations of the FDCPA and all defendants were sued for alleged violations of Illinois state law. The docket number for this case is Case No. 1:15-cv-08163.
The plaintiff in this case alleged that she bought a vehicle from a retailer and entered into an installment contract. The plaintiff alleged that the retailer then assigned the contract to a creditor who financed the purchase and who obtained a security interest in the vehicle. She alleged that after she started missing her payments, the creditor hired a repossession company who then hired another repossession company to conduct a repossession. The plaintiff alleged that her vehicle was repossessed on November 12, 2014 and that the defendants did not provide the required notice of the repossession to the police either before or after the repossession.
Additionally, the plaintiff alleged that the creditor sent her three notices including a Notice of Right to Reinstate, a Notice of Plan to Sell the Property, and an affidavit. According to Illinois state law, a creditor must send a Notice of Right to Reinstate to a consumer within three business days of a repossession. However, the plaintiff alleged that the notice(s) she received was postmarked as November 26th and that she did not physically receive them until December 1st, which was after the three-day grace period.
The plaintiff also alleged that on the Notice of Right to Reinstate, the creditor indicated that she was owed $1,333.52 on her balance. However, she alleged that she did not owe this much money. Additionally, the plaintiff alleged that on the pre-sale notice, the creditor stated that she owed $17,719.61 and that if she paid this amount back, she could reclaim her vehicle. The plaintiff alleged that this was a false amount and was not what she truly owed on the agreement. Furthermore, the plaintiff alleged that these notices were confusing because she could not determine exactly how much she needed to pay in order to redeem the vehicle. The plaintiff alleged that the Notice to Reinstate indicated that she would have to pay $1,718.52, yet the pre-sale notice indicated that she would have to pay $18,104.81.
Additionally, the plaintiff alleged that the affidavit of defense form she received did not provide a number for her to call. The plaintiff also alleged that she mailed back the affidavit to her creditor on December 15, 2014, which was less than 21 days after she received the form. She alleged that in Illinois, an affidavit has to be received by a lienholder less than 21 days after the date of mailing in order to stop the transfer of title and that if the affidavit is received in a timely manner, the lienholder has to apply to a court in order to determine possession rights. The plaintiff alleged that after she mailed the affidavit, she called the creditor in order to inquire about the status of her vehicle and was informed that the vehicle was sold on December 16, 2014. The plaintiff also alleged that the creditor told her that a deficiency balance remained and that interest continued to accrue on the amount. Furthermore, she alleged that she was never told how or where she could retrieve her personal items that were left inside of the repossessed vehicle.
The plaintiff alleged that the repossession companies violated the FDCPA during the repossession because they did not have the legal right to repossess her vehicle. The plaintiff alleged that by failing to notify the police of the repossession, the repossession companies’ right to repossession was removed and their behavior constituted an unfair debt collection practice.
What constitutes a violation of my rights during the repossession process?
A creditor has to follow the laws of the state that the consumer lives in during the repossession process. If a creditor hires any third-party repossession companies, they must abide by the state’s respective repossession laws and the Fair Debt Collection Practices Act, a federal law that provides legal protection to consumers against unlawful debt collection practices. Depending on the state, a creditor may have to first send the consumer a pre-repossession notice in order to lawfully repossess the vehicle. When conducting a repossession, a repossession company is not allowed to breach the peace. A breach of the peace can include using physical force or violence, damaging property, and continuing with a repossession after verbal objections have been made; the act is illegal in all U.S. states.
In some states, when conducting a repossession, it is illegal for a repossession company to trespass onto an individual’s property without their permission. Repossession companies also are not allowed to repossess the wrong vehicle. Depending on the state, a creditor may have to send the consumer a repossession notice, a pre-sale notice for the disposition of the vehicle, and/or a post-sale notice after the repossession has occurred. If the vehicle was unlawfully repossessed, the consumer may not have to pay the deficiency balance on their loan. If a repossession company violated the FDCPA, then pursuant to that federal statute, the repossession company would have to pay the consumer compensation of up to $1,000 in statutory damages and cover their legal fees and any costs.