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The Alabama Supreme Court says the Cash Advance Company is not a debt collector.
Alabama's Supreme Court has overturned a panel decision granting $200,000 in compensation to the claimant and ruled on appeals that the Fair Debt Collection Practices Act (FDCPA) did not cover the collateral transactions in question. Complete Cash Holdings, LLC v. Powell, was the result of a falsified tenancy contract for a share.
Ms. Powell's grandchild stolen the track from Ms. Powell's lorry, and then, with the help of a Complete Cash agent, made a fake arrangement with Complete Cash to pledge the lorry. Grandchild recieved $2,352 in cash from Complete Cash, allegedly to give Complete Cash a safety interest in the vehicle, and fake autographs so her grandma was obliged to pay back the credit (plus a financing fee) in the following months.
None of this happened without the knowing of Ms. Powell. However, the payment finally ceased and Ms. Powell's lorry was taken back. Mrs Powell later filed a lawsuit against Complete Cash. It has, inter alia, made allegations under the Alabama Pawnshop Act (Ala. Code § 5-19A-1, et. seq.) and the FDCPA. A number of lawsuits were rejected in plenary session by the Courts, but they did not reject the FDCPA lawsuit, and so the FDCPA lawsuit and several others were finally put before a panel of judges.
Mrs. Powell was chosen by the panel of judges and paid 200,000 dollars in compensation. Complete Cash repeated in its statement of objections its claim that the FDCPA was not applicable to the facts of the case, since Complete Cash was not a 'collection agency' within the meaning of the FDCPA. In particular, Complete Cash claimed that it'operates in the consumer credit market through suspended presentation arrangements and security interests' and that, according to the DFA, it is a 'creditor' (and not a 'debt collector').
Alabama's Supreme Courts concurred with Complete Cash, stating that the company's operation'is to lend to borrower, which puts these borrower in debt', and that 'Complete Cash is Powell's lender'. Though Ms Powell appealed to argue that a "creditor" can still become a "collection agency" if he tries to assert a lien, the tribunal dismissed that reason.
Instead, the tribunal decided that Complete Cash only collects its own liabilities and enforces its own lien when it repossesses the lorry. This was not the collection of receivables from others and could therefore not be a 'collection agency' within the meaning of the FDCPA. Alabama's Supreme Tribunal seldom gets an occasion to get involved in FDCPA issues.
In this case, the court's decision should offer some convenience to businesses like Complete Cash that do businesses in Alabama. Now, if businesses only collect their own debt, they have a powerful example on which they can depend when they argue that they should not be liable under the FDCPA.