InfoBytes Blog
Pennsylvania settles with bank to resolve “aggressive” collection practices
On August 19, the Pennsylvania attorney general announced it had entered into an Assurance of Voluntary Compliance with a national bank to end the bank’s “aggressive” debt collection practices. According to the AG, the bank allegedly filed collection lawsuits against individuals with unpaid auto loans “in a district justice court in Warren, Pennsylvania despite the fact that most of the defendants in those actions were consumers who purchased their vehicles in another part of the state and merely had their vehicle installment contract assigned to [the bank].” After obtaining judgments, the bank also allegedly violated Pennsylvania law by sending post-judgment letters that threatened further legal action, including a sheriff’s sale of an individual’s vehicle. These alleged misrepresentations constituted an unfair or deceptive debt collection act or practice, the AG stated. The bank did not admit to the violations, but agreed to modify its collection practices to, among other things, (i) strike all existing judgments entered between 2013 and the effective date of the agreements in a magisterial district court that the consumer did not reside in at the time the vehicle was purchased or the action commenced, or that was not where the vehicle was purchased; (ii) issue a credit to the deficiency balance on any amount that was paid as a result of a judgment; (iii) refund any remaining amounts once the deficiency balance has been reduced to $0; and (iv) pay $15,000 in monetary relief.