Auto Lender Loses Motion To Dismiss Class-Action Lawsuit Claiming Violations of FDCPA, TCPA

Subprime auto lender Santander Consumer USA lost its fight to have a class-action lawsuit against the company dismissed, and must face claims it violated the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act when trying to collect on delinquent car loan accounts.

The motion to dismiss was denied by federal judge Charles Kocoras in the Northern District of Illinois.

The plaintiff is alleging violations of the TCPA because she received between 20 and 30 pre-recorded voice calls and “many dozens” of “automatic telephone dialing system” calls. The plaintiff also submitted payments to Santander via the telephone and online, and in both cases, was charged a “convenience fee” for making those payments. The plaintiff alleges that the convenience fees violated the FDCPA, “which prohibits debt collectors from collecting ‘any amount’ concerning a consumer debt unless such amount is ‘expressly authorized by the agreement creating the debt or permitted by law.”

Santander argued that the one year statute of limitations on the FDCPA claim had expired and that convenience fees are not prohibited under the FDCPA.

While the plaintiff’s claim was brought more than a year after the last convenience fee was paid, the plaintiff was also eligible to be a member of two other class-action lawsuits filed against Santander for similar claims. The commencement of those other class-action suits suspends the statute of limitations to members of the class. Santander did not dispute that the plaintiff was an eligible member of the other class-action lawsuits, but tried to argue that the earlier suits were not similar enough to the one being brought now. The court disagreed.

That Santander allegedly “pushes” consumers to pay through a service maintained by Western Union, and that Santander allegedly uses the service as a revenue generating opportunity were enough for the judge to disagree with rulings in other jurisdictions that held convenience fees were not a violation of the FDCPA.

Santander was given until the end of the month to answer the amended complaint.

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