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Systems & Services Technologies “Mini-Miranda” Warning FDCPA Class Action

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While companies owed debts have certain rights, the behavior of third-party debt collectors is highly regulated, thanks to the Fair Debt Collection Practices Act (FDCPA). The complaint for this class action claims that debt collector Systems & Services Technologies, Inc. did not adhere to proper practices when it attempted to collect a debt from the plaintiff in this case.

Two classes have been proposed for this action.

  • Class A is all persons in the US who received a first correspondence from Systems & Services or its agents that is substantially similar to the October 2, 2017 letter plaintiff received, between February 28, 2017 and February 28, 2018.
  • Class B is all persons in the US who received a telephone call or message from Systems & Services or its agents during which it did not disclose that it was trying to collect a debt and that any information obtained would be used for that purpose.

Congress passed the FDCPA because abusive debt collection is a destabilizing force, contributing to personal bankruptcies, marital instability, loss of jobs, and invasions of privacy.  The FDCPA is meant both to stop abusive practices and to ensure that companies that do use appropriate means of collection are not disadvantaged by abusers.

Plaintiff Adrian Chavez allegedly incurred a personal, consumer debt from BorrowersFirst, Inc., and then allegedly fell behind in his payments sometime around May 2017. The debt was later transferred to Systems & Services.

On October 2, 2017, the company sent a letter to Chavez telling him that the debt had been transferred to it. According to the complaint, this was the first communication with Chavez. On October 6, the complaint says, the company called Chavez and left a voicemail that did not included disclaimers required by the FDCPA; and the following day, it sent a letter demanding payment of the debt.

None of these communications informed Chavez that if he did not dispute the validity of the debt within thirty days, the company would assume the debt was valid, and none of them included the information that if he did dispute the debt’s validity, the company had thirty days to produce verification. The complaint therefore claims that they violated one of the provisions of the FDCPA.

Another violation, the complaint claims, is that the October 6 message failed to provide a “mini-Miranda” warning, in which a company informs a consumer that it is a debt collector, that it is trying to collect a debt, and that any information obtained will be used for that purpose.

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