Class Action Lawsuits is a common part of our society. They are lawsuits in which a group of people are brought together for the purpose of obtaining redress for an unfair loss. In most cases, the person bringing the suit is trying to hold another person or company accountable for some unfair act. For example, if a business owner intentionally drove over a sidewalk because of bad weather conditions, that owner may be held liable for injuries that were suffered by someone walking on or across the sidewalk because of the owner’s negligence. The idea is to ask that party to compensate the victims for their losses or for their medical bills. The damages sought in these lawsuits are generally in the form of money or a structured settlement payment.
Class actions are supported by what is known as a “derivative process”, which means that the derivative would attempt to obtain an award based on the same facts that triggered the original lawsuit.
In the past, this was accomplished by sending “template letters” and requests for periodic payments to the original debtors. Today, the process has been streamlined and now Class Action lawsuits are sent through the mail with pre-written letter templates, making it very convenient for the attorney to initiate the lawsuit on behalf of the client.
This new process brings about another problem faced by today’s debtors and lenders.
Many plaintiffs fail to realize that they have a contractual right to receive one-time, lump-sum monetary compensation; the settlement amount is not a guarantee that they will receive any amount of money, even a large amount of money. As mentioned above, the original mortgage contract contained an agreement between the lender and the debtor that the lender could collect non-refundable penalty charges from the debtor for late payments. If a lender attempts to write a judgment against a debtor for non-refundable penalties, the borrower can assert the provisions of the fair debt collection practices act to prevent the lender from proceeding with the lawsuit. In addition, many states also allow the state to become involved in the lawsuit by adopting a law allowing the state to become involved in the lawsuit on behalf of the debtor.
The first step that a plaintiff should take when engaging in a class action lawsuit against a mortgage lender or debt collection agency is to consult with an experienced fDCPA attorney who specializes in this area of consumer rights.
During this time, the attorney will ascertain whether there are any valid claims that the plaintiff may have against the debtor that could be used as basis for the class action lawsuit. It is also important to determine if the debtor’s individual state laws allow the state to participate in the action.
After determining if the debtor’s individual states allow the state to become involved in the action, the plaintiff will move on to determining if the debt collections agency violated any of the fdcpa guidelines.
One of the most common violations is the failure to provide the client’s proper notice that the agency is engaging in these actions. Failure to give proper notice or warnings that the action is pending creates a likelihood of the agency engaging in illegal activities. Once the nature of the violations is determined, the plaintiff should determine whether it is feasible to pursue a class action lawsuit against the debt collections agency.
If the complaint does not meet the requirements required in paragraph (b) above, it will not be able to proceed with the complaint.
In addition, if the complaint does meet all the requirements, but there are still defects, the plaintiff will not be permitted to proceed. The plaintiff need only file a written complaint with sufficient evidence to support the claims contained within the complaint. The complaint also must be filed with the appropriate office within 45 days of the date of default. If the complaint is found to be justified on all bases, the plaintiff will be provided a final letter of demand from the defendant granting approval of the complaint and entering an agreement of compromise.