A Connecticut judge dismissed the majority of a pro se consumer’s claims against a debt collection agency, but the case is worth reviewing to understand the misinformation about the debt collection process circulating among consumers.
11/17/2023 2:10 P.M.
11 minute read
There are thousands of videos on TikTok and YouTube posted by people who advise viewers how to file complaints or disputes to “get rid” of their legally owed debt or to have debts removed from their credit report. Often, this information is wildly incorrect.
Unfortunately, these videos are reaching millions of people who may use the information to guide their responses to collection letters and calls.
For example, the allegations in a recent case, Rivera v. Zwicker & Associates, P.C., mirror many of the “tips” these self-appointed debt collection experts are sharing on social media. In this case, Wilfred Rivera Jr., proceeding pro se, filed a lawsuit against Zwicker & Associates P.C., a debt collection agency, alleging violations of multiple federal regulations—many of which either have no private right of action or don’t apply to debt collectors.
While a clerical error will create liability on one of the Fair Debt Collection Practices Act claims, U.S. District Court of Connecticut Judge Michael P. Shea dismissed all the other claims, noting that pro se litigants are required to state a plausible claim for relief. The consumer, for the most part, did not do this.
At various times throughout late 2022 and early 2023, Zwicker sent debt collection notices to Rivera. The notices informed Rivera that “Zwicker & Associates, P.C. is a debt collector” and that it was “trying to collect a debt you owe to American Express.” The notices also included information about the credit card account at issue, including the account number and the amount owed, as well as information on how to dispute the debt and request verification.
Rivera requested Zwicker validate the alleged debts for each of the four American Express accounts at issue. The debt collector sent the statements for each account—although for one of the accounts it allegedly attached the wrong credit card statements, instead attaching statements for another account of Rivera’s.
Rivera then sent Zwicker a “Notice of Violations Under the FDCPA & Federal Laws Under Title 18,” in which he outlined his belief that Zwicker’s collection attempts were in violation of various provisions of the FDCPA as well as several other federal laws. He demanded $40,000 to settle his claims.
He alleged that Zwicker violated several provisions of the FDCPA, including:
- Engaging in prohibited communications concerning his debt under 15 U.S.C. Section 1692b,
- Failing to get prior consent to contact him under 15 U.S.C. Section 1692c,
- Using “obscene” language in collection attempts under Section 1692d,
- Making false or misleading statements under Section 1692e,
- Not providing sufficient validation of his debt under Section 1692g,
- Not being authorized to bring a suit against him under Section 1692i, and
- Furnishing deceptive forms under Section 1692j.
Zwicker filed a motion to dismiss, arguing that Rivera failed to plausibly plead any of his claims. Generally speaking, the judge agreed.
Here’s how the judge responded to Rivera’s FDPCA claims:
Section 1692b prohibits certain types of communications between a debt collector and “any person other than the consumer,” including communication indicating that the “consumer owes any debt.” But the statute does not cover a letter from a debt collector addressed to the consumer himself. Rivera does not allege that Zwicker communicated with a third party concerning his debt. Therefore, the judge dismissed his Section 1692b(2) claim.
Rivera seems to misconstrue Section 1692c(a) to prohibit a debt collector from communicating with him under any circumstance unless either he or a court gives the debt collector prior permission to do so. But Rivera does not make any allegation that Zwicker attempted to communicate with him during one of the three specific circumstances covered by Section 1692c(a), such as at an unusual time or place, so his Section 1692c(a) claims failed.
Rivera alleged that Zwicker violated 15 U.S.C. Section 1692d(2) by using what he called “obscene” language in its communications with him. Section 1692d(2) prohibits debt collectors from using “obscene or profane language” in connection with the collection of a debt. Rivera alleged that the sentence “is an attempt to collect a debt” is obscene. The judge disagreed.
“The complained-of language plainly does not qualify as profane or obscene. In fact,” the judge noted, “the FDCPA mandates the use of this language, and it is unclear how Zwicker or any other debt collector could collect a debt in accordance with the FDCPA without informing a debtor that it is ‘attempt[ing] to collect a debt.’” This claim was dismissed.
Rivera alleged that Zwicker violated provisions of Section 1692e by stating in communications that it is a law firm. While it is true that Zwicker notified Rivera that it is a law firm in its responses to his requests for debt validation, Rivera didn’t make any allegation that these representations were false or misleading. He didn’t, for example, allege that Zwicker is not a law firm.
Section 1692e(10) prohibits “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” Though Rivera’s allegations under this provision are not entirely clear, he suggested that one of Zwicker’s notices was misleading because the amount of the debt is stated as a “positive balance,” as opposed to a negative balance, “lead[ing him] to believe [that he would be] paid.” This interpretation is, the judge noted, “bizarre” and “idiosyncratic” given the clear language in Zwicker’s communications that it was “trying to collect a debt that you owe …”
Section 1692e(12) prohibits “[t]he false representation or implication that accounts have been turned over to innocent purchasers for value.” Rivera alleged that Zwicker has violated this provision “because [Zwicker] purchased the debt or [is] partnered with the alleged original creditor.” But the judge pointed out that debt collectors do not violate Section 1692e(12) by “partner[ing]” with creditors to collect debts on their behalf—that is simply what debt collectors do.
Section 1692e(14) prohibits “[t]he use of any business, company, or organization name other than the true name of the debt collector’s business, company, or organization.” Rivera did not allege that Zwicker & Associates, P.C. is not the defendant’s “true name.” Instead, he suggested that Zwicker violated Section 1692e(14) by stating that Rivera owed money to American Express. But Section 1692e(14) does not prohibit debt collectors from stating the identity of the original creditor. In fact, 15 U.S.C. Section 1692g(a)(2) requires creditors to provide debtors with “the name of the creditor to whom the debt is owed.”
These claims were dismissed.
Rivera alleged that Zwicker’s debt validations and verifications were not sufficient under Section 1692g, but the notice attached to his complaint contains all the required information as stated under the FDCPA. The claim was dismissed.
Rivera alleged that Zwicker violated Section 1692i(a)(2) because he did not give Zwicker prior authority to sue him. But Section 1692i(a)(2) does not require anything of the sort. Section 1692i is the venue provision of the FDCPA, and Section 1692i(a)(2) merely explains the venue requirements for any suit brought by a debt collector against a consumer for collection actions that do not involve interests in real property. Rivera did not allege that Zwicker sued him, much less that it sued him in the wrong venue. The claim was dismissed.
Rivera argued that Zwicker violated Section1692j, which provides that:
“It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.”
Rivera did not plead any facts that Zwicker provided American Express with dunning letters; in fact, his complaint asserted that Zwicker itself, not American Express, sent the letters. The claim was dismissed.
Rivera did, however, state a plausible claim under Section 1692g(b) as to one of the accounts at issue. Section 1692g(b) requires, in relevant part, that if a consumer disputes the debt, “the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.”
Rivera asked Zwicker to verify the alleged debts for each of the American Express accounts at issue. For three of the accounts, Zwicker validated the debts by sending credit card statements associated with them.
But Zwicker did not, however, validly verify the debt associated with account 32009. That is because Zwicker allegedly attached the wrong credit card statements to its verification letter as to this account, instead attaching statements for another of Rivera’s American Express accounts ending in account number 01004. Because Zwicker allegedly attached the wrong credit card statements to its verification letter, it would be impossible for Rivera to be sure that the debt associated with account 32009 is not one that he had already paid. This claim survived.
Additional Claims Made
The FDCPA was just the beginning in this suit.
Rivera also claimed Zwicker violated the Gramm-Leach-Bliley Act, which failed because the GLBA does not provide for a private right of action.
Rivera brought several claims under various provisions of the Truth in Lending Act (TILA), but Zwicker is not subject to TILA’s requirements because “TILA only regulates creditors.”
Rivera alleged that Zwicker also committed racketeering in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act. The judge noted that “even if one were to liberally read Rivera’s complaint to allege that Zwicker committed fraud as a RICO predicate, and even if one assumes his allegations of fraud meet the heightened pleading standards of Rule 9(b), he does not make any allegation as to what might constitute the RICO enterprise here.”
Next, Rivera brought a passing claim under 12 C.F.R. Section 1002, which is Regulation B of the Equal Credit Opportunity Act. The judge stated: “His allegations under this regulation are sparse. He does not explain what specific provisions of the regulation Zwicker has allegedly violated, nor does he explain how Zwicker’s actions ran afoul of the regulation. Though courts in this circuit read pro se submissions liberally, ‘we do not create arguments out of whole cloth.’”
Rivera also alleged that Zwicker violated 16 C.F.R. Section 433.3. This regulation is an exemption to the Federal Trade Commission’s Holder Rule. Section 433.3 exempts sellers “who ha[ve] taken or received an open end consumer credit contract before [Nov.] 1, 1977.” The judge stated: “Rivera does not provide any explanation as to how the Holder Rule or the exemption to it apply here. Again, I will not fashion an argument for Rivera out of whole cloth. As such, I dismiss this claim.
Rivera appeared to allege that Zwicker had no right to collect the debts at issue in the case because, according to him, “all debt is the obligation of the United States.” In support of this argument, he cited 18 U.S.C. Section 8, 28 U.S.C. Section 3002(1)(B), and House Joint Resolution 192 of 1933, which “was adopted by Congress to prohibit contracts that demand payment in gold” following the abandonment of the gold standard.
The judge stated: “Rivera, stringing these laws together, asserts that the U.S. has assumed all consumer debts and that Zwicker ‘has no authority on behalf of the United [S]tates to collect …’ As I have recently explained in a similar case brought by Rivera, ‘[t]hese claims are legally and factually meritless.’”
Finally, Rivera alleged that Zwicker failed to register as a debt collector in Connecticut. The Connecticut statute that requires debt collectors to obtain the appropriate business license is the CCAA. However, because no private right of action exists under the CCAA—and that enforcement lies with the Banking Commissioner—the claim was dismissed.
On Sept. 18, 2023, the judge granted in part Zwicker’s motion to dismiss, except Rivera’s claim that Zwicker failed to sufficiently verify the debt associated with account 32009.
Scattershot—and largely frivolous—lawsuits against debt collection agencies are certainly not new. While we may never know if the plaintiff in Rivera v. Zwicker & Associates, P.C. used social media advice to craft his suit, consumers seem to be flocking to these amateur financial advice videos that deliver misleading guidance.
According to a study by Personal Capital, more than half of TikTok users get financial advice on the platform, yet only 41% fact-check that advice.
This is dangerous, as an analysis found that 1 in 7 videos posted by TikTok’s finance influencers is misleading.
For example, this CNet article cites a TikTok posted by an influencer explaining the timeframe you have to respond to a collection lawsuit.
“However, response windows vary by state, and the risks mentioned don’t apply in all states. For instance, wages are not garnished for collection cases in Texas, South Carolina and a few other states,” the article states.
CNet notes that another TikTok influencer suggests using the “statute of limitations” defense if a collection agency sues you.
“This general legal tactic is common advice on TikTok, but it’s also misleading,” the article says.
Here are other examples of videos from YouTube that offer broad and often incorrect advice, each with more than 10 million views: “Debt Collection Laws How To Mark Up Your Collection Letters” and “How to Delete Any Collection Using the FDCPA Act.”