Debt Collector Unlawfully Demanded Post-Judgment Interest, Class Action Alleges

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A proposed class action claims Lyons, Doughty & Veldhuis, P.C. violated the Fair Debt Collection Practices Act (FDCPA) by attempting to collect interest on alleged debts for which interest had been waived.

Filed by a Bergen County, New Jersey resident, the 16-page lawsuit claims the Mt. Laurel-based law firm has issued misleading debt collection communications that have put alleged debtors at “a harmful disadvantage” and robbed them of protections outlined in the FDCPA.

“The purpose of the FDCPA is to provide information that helps consumers to choose intelligently,” the complaint reads. “The Defendant’s false representations misled the Plaintiff in a manner that deprived Plaintiff of his or her right to enjoy these benefits.”

According to the lawsuit, the plaintiff incurred an alleged debt to Capital One that was assigned to a non-party law firm for collection, after which a judgment was entered against the consumer in the amount of $1,706.49 in a state court action. Per the case, the defendant substituted as attorney of record for Capital One in September 2012, and the non-party law firm withdrew as attorney of record.

On March 27, 2020, the defendant filed in the state court action an application for a wage execution in which it was noted that post-judgment interest was waived, the suit relays. Despite the application’s indication that interest was waived, however, the defendant still sought to collect from the plaintiff $47.52 in interest from prior writs, according to the case.

The lawsuit alleges the defendant was not entitled to collect interest from prior writs, and that the demand for such would confuse the least sophisticated consumer as to whether such an amount were really owed.

Per the case, the defendant’s “unfair and abusive” debt collection practices violated the plaintiff’s right under the FDCPA to “a trustful and fair debt collection process.”

The lawsuit alleges the defendant law firm has unlawfully sought to collect post-judgment interest from at least 30 other individuals in New Jersey.

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