In Stratton v. Portfolio Recovery Associates, plaintiff alleged that defendant violated the FDCPA by attempting to collect statutory interest on a purchased debt after the original creditor waived the contractual right to collect interest. The district court granted summary judgment in favor of defendant, finding that the statutory interest charge was permitted by state law, and plaintiff appeal. The appellate court reversed, finding that there is no right under state law to collect statutory interest after the contractual interest right is waived, and that attempting to collect any interest after waiver is a violation of the FDCPA.
In Fulk v. LVNV Funding, plaintiff alleged that defendant’s collection lawsuit violated the FDCPA because the suit was time-barred and because it sought prejudgment interest that was not otherwise permitted. Defendant moved to dismiss, arguing the collection suit was timely and that prejudgment interest is available for a liquidated damage claim. The court dismissed the claim arising out of an allegedly expired limitation period, finding that the collection suit was timely brought under state law, even if the credit card agreement was subject to the “unwritten” contract limitation period. The court denied the motion on the interest claim though, finding that defendant could not seek an award of prejudgment interest until the court actually entered a judgment, and that credit reporting an amount that included the interest charge was improper.
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