We’ve all heard stories about those “special” consumers, those who claim to be sovereign citizens and don’t have to follow the rules that the rest of us do. They believe that courts have no jurisdiction over them and that they are immune from having to follow the laws. A plaintiff in Maryland is learning the hard way that creating your own form of currency and using it to pay a debt doesn’t necessarily mean the debt is paid after a District Court judge granted a defendant’s motion for summary judgment in case alleging violations of the Fair Debt Collection Practices Act and Fair Credit Reporting Act.
A copy of the ruling in the case of Frazier v. LVNV Funding et al. can be accessed by clicking here.
The plaintiff incurred a $1,700 credit card debt, that she claims she paid in full. The payment was in the form of an “Equitable Remittance Coupon” as part of a “Conditional Acceptance Contract” that was mailed to the creditor. This coupon, the plaintiff claimed, assigned the debt in question to the federal government because “the gold standard was removed from the monetary system.”
Perhaps surprising to nobody, the creditor did not accept the coupon as payment and began reporting the debt as unpaid and late to the credit reporting agencies. The debt was subsequently sold to the defendant, which also began to report the debt to the credit bureaus.
The plaintiff filed suit, alleging the defendant and the one of the three major credit reporting agencies, alleging violations of the FCRA and FDCPA, as well as state law in Maryland. The defendant was accused of not properly investigating a dispute and using false means to collect a debt it had no right to collect.
But, as Judge James K. Bredar of the District Court for the District of Maryland pointed out, the defendant did have a legal right to collect on the debt.
“Plaintiff’s claims fail against LVNV for several reasons, including that … she simply did not pay the debt she owed to” the original creditor, Judge Bredard wrote. “… the record establishes that Plaintiff tendered an invalid form of payment and apparently expected her debt to Synchrony Bank to be forgiven.”