Under 15 U.S.C. § 1692f(6)(A), a provision of the Fair Debt Collection Practices Act, a debt collector is prohibited from engaging in self-help repossession if it does not have the “present right to possession” of the collateral. Under an Indiana law governing secured parties’ right to take possession of collateral after a default, a secured party proceeding without judicial process has the right to take possession of the collateral only it does not breach the peace. If the peace is breached, the secured party must desist and pursue a court order.
In this case, plaintiff Richards alleged that the defendant debt collectors breached the peace when attempting to repossess her car and that, by doing so, they lost the present right to possession of the car. Therefore, she alleged, the debt collectors violated 15 U.S.C. § 1692f(6)(A) when they repossessed her car. The district, refusing to look at the state law governing the right to take possession of collateral after a default in determining whether the debt collectors had a present right to possess the vehicle, granted summary judgment to the debt collectors.
Public Citizen served as co-counsel for Ms. Richards on appeal. Our briefs explained that state law informs whether debt collectors have a present right to possess collateral under section 1692f(6)(A) and that the debt collectors violated that provision in repossessing Ms. Richards’s vehicle without a present right to possess it. The Seventh Circuit agreed with us that whether a debt collector has a present right of possession under section 1692f(6)(A) depends on state law and, accordingly, reversed the district court’s order.