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  1. #1
    Join Date
    Nov 2012
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    6

    Default Collection Agency Suing in the Name of Original Creditor

    Can a collection agency who purchased collection rights to a charged off debt legally sue in the name of Original Creditor?

    Collection Agency has filed a Complaint naming Amex as Plaintiff. Called Amex to check status of alleged account and they report they no longer have access to account and to call the agency. Eventually spoke to a representative who stated that the account was sold to agency.

    It appears that collection agency knowingly filed suit in name of original creditor to avoid the difficulty in proving the validity of a debt that's no longer owned by original creditor. Wouldn't this be considered an unfair and deceptive practice? Can the case be dismissed due to the Plaintiff not being a real party of interest?

    Charged off accounts are sometimes assigned or purchased with rights to sue in the name of creditor. Even if this is true, wouldn't there still be grounds for dismissal?

  2. #2
    Join Date
    Jan 2006
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    38,867

    Default Re: Collection Agency Suing in the Name of Original Creditor

    was amex the only name listed as plaintiff?

  3. #3
    Join Date
    Nov 2012
    Posts
    6

    Default Re: Collection Agency Suing in the Name of Original Creditor

    Yes.

    I have also proven their affidavit to be copy and pasted robo-testimony signed by an affiant from the collection agency who fraudulently claimed he is employed by Amex.

  4. #4
    Join Date
    May 2008
    Location
    Louisville, KY
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    1,877

    Default Re: Collection Agency Suing in the Name of Original Creditor

    You should probably find a good attorney who is well versed in collections law. (because that just can't be legal)

  5. #5
    Join Date
    Sep 2005
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    98,846

    Default Re: Collection Agency Suing in the Name of Original Creditor

    It could be that the discussion over the phone involved a misunderstanding - with the AMEX employee describing an account that was no longer available to her because it was in litigation. We can't investigate that for you. You can raise appropriate affirmative defenses in court - make sure you do so in a timely manner - and bring a motion on this issue if it appears that the named plaintiff is not actually a party to the case.

  6. #6
    Join Date
    Jan 2006
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    38,867

    Default Re: Collection Agency Suing in the Name of Original Creditor

    I would like to point out that there are two different situations where a "collection agency" is involved with the collection of a debt.

    1. the original creditor sells the debt to a buyer (often referred to as a junk debt buyer/ jdb). In this situation, the original creditor no longer has any rights to recover from the debtor. The buyer does though. In such a situation, the buyer is who would now be the plaintiff if the debtor is sued. The buyer is often identified in error (by the buyer) as a collection agency when in fact, they are not actually a collection agency. They are the owners of the debt although due to the origination of the debt, they are required to comply with the FDCPA which covers 3rd party collections (where an agency is hired to collect on the OC's accounts) and not first party collections (collection attempts made by the original creditor on their own accounts).




    2. the original creditor retains ownership of the debt. They hire a collection agency (or could actually be an in house collection department). In such a situation, if the debtor is sued, the original creditor would be named as plaintiff.


    In today's world, so often people believe that all debts are sold off to collection agencies (or more correctly, debt buyers). If the debt is less than a year or two old, there is a great chance it is still owned by the OC (original creditor). At some point, the OC's do tend to sell off their bad accounts to buyers. Some creditors hang on to their accounts and never sell them.

    You need to clarify which situation it is when dealing with a collection agency.

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