Dismissal of Claims Alleging Violation of the Fair Debt Collection Practice Act
Unifund CCR Partners v. Harrell, Kentucky, Nelson Circuit Court, Case No. 12-CI-00661 (June 21, 2013)
On June 21, 2013, the Nelson Circuit Court in Kentucky dismissed a counterclaim filed by a consumer alleging that Unifund violated the Fair Debt Collection Practices because Unifund requested statutory prejudgment interest in a state court collection suit. In Unifund CCR Partners v. Harrell, Kentucky, Nelson Circuit Court, Case No. 12-CI-00661 (June 21, 2013) Unifund filed a collection suit seeking to collect on a past due credit card account which had been charged off by the original creditor. In the state court complaint, Unifund sought 8 percent statutory prejudgment interest under KRS § 360.010 from the date the original creditor charged off the past due credit card debt. Ms. Harrell alleged that Unifund’s mere request for such interest violated the FDCPA because the original creditor waived its right to collect any interest when it charged off the account.
Upon Unifund’s Motion to Dismiss filed by FDCPA defense counsel Joseph Tucker and Elizabeth Shaffer of Dinsmore, the Court disagreed with Ms. Harrell’s assertions. To the contrary, the Court clearly held that merely because the original creditor may have waived the right to collect contract interest when it charged off credit card debt, did not waive Unifund’s right, as an assignee, to request that the state court award it 8 percent statutory prejudgment interest from the date of charge off.
The Court thus found that “ Unifund's claim for prejudgment interest does not violate the FDCPA” and dismissed Ms. Harrell’s counterclaim with prejudice.
On June 21, 2013, the Nelson Circuit Court in Kentucky dismissed a counterclaim filed by a consumer alleging that Unifund violated the Fair Debt Collection Practices because Unifund requested statutory prejudgment interest in a state court collection suit. In Unifund CCR Partners v. Harrell, Kentucky, Nelson Circuit Court, Case No. 12-CI-00661 (June 21, 2013) Unifund filed a collection suit seeking to collect on a past due credit card account which had been charged off by the original creditor. In the state court complaint, Unifund sought 8 percent statutory prejudgment interest under KRS § 360.010 from the date the original creditor charged off the past due credit card debt. Ms. Harrell alleged that Unifund’s mere request for such interest violated the FDCPA because the original creditor waived its right to collect any interest when it charged off the account.
Upon Unifund’s Motion to Dismiss filed by FDCPA defense counsel Joseph Tucker and Elizabeth Shaffer of Dinsmore, the Court disagreed with Ms. Harrell’s assertions. To the contrary, the Court clearly held that merely because the original creditor may have waived the right to collect contract interest when it charged off credit card debt, did not waive Unifund’s right, as an assignee, to request that the state court award it 8 percent statutory prejudgment interest from the date of charge off.
The Court thus found that “ Unifund's claim for prejudgment interest does not violate the FDCPA” and dismissed Ms. Harrell’s counterclaim with prejudice.