Dec. 4, 2008
California Court Approves Class-Action Lawsuit Against Debt Collector Accused of Abusive Tactics
Suit Says Company Wrongly Threatened Consumers With Criminal Prosecution
WASHINGTON, D.C. – A California court has ruled that almost a million consumers who were victims of an overly aggressive debt collector are eligible to participate in a class-action lawsuit against the company.
In the suit, Del Campo v. ACCS, California consumers represented jointly by Public Citizen and private attorney Paul Arons of Friday Harbor, Wash., claim that American Corrective Counseling Services Inc.’s threats of prosecution violated their rights under state and federal consumer protection laws.
The class includes an estimated 900,000 people who received a demand letter from ACCS from Dec. 11, 1997, to the present. More than 350,000 of these consumers have paid ACCS fees.
ACCS uses its contract with local prosecutors to send out letters on official stationary, threatening consumers who have written bad checks with criminal prosecution or jail unless they pay collection fees. Many of these consumers were threatened with criminal charges, even though no prosecutor had reviewed their cases and ACCS, as a private debt collector, lacks the authority to make such threats.
“The decision to certify this class-action sends a message to debt collectors that they will be held accountable for their actions by the courts,” said Deepak Gupta, the Public Citizen attorney who handled the case, along with Public Citizen attorney Bonnie Robin-Vergeer and Arons. “Debt collectors, such as ACCS, cannot use their status as government contractors to strong-arm consumers.”
ACCS had claimed that it was entitled to immunity from suit by virtue of its contracts with local prosecutors. But in a ruling earlier this year, the federal appeals court in San Francisco rejected that immunity defense and described ACCS’s practices as “debt collection rather than law enforcement.”
Members of the class will receive notice of the case.
READ the documents in the case.