The Federal Trade Commission has filed an amicus, or friend of the court, brief with the U.S. Supreme Court in support of consumers’ ability to sue debt collectors under the terms of the Fair Debt Collection Practices Act. The brief was filed jointly with the Department of Justice and the Consumer Financial Protection Bureau.
The amicus brief petitions the Supreme Court to overturn a Tenth Circuit Court of Appeals ruling that consumers who sue collection agencies and lose are responsible for paying both parties’ legal bills. The ruling stems from the case of Olivea Marx, who filed suit against debt collector General Revenue Corporation after the collector contacted her employer to obtain information about her employment status.
Marx, who believed that General Revenue had violated the Fair Debt Collection Practices Act, lost the case and was ordered to pay $4,500 to cover the collections company’s legal costs. The brief argues that the Tenth Circuit misinterpreted the Fair Debt Collections Practices Act in its ruling. The act specifies that consumers who win lawsuits against debt collectors may recover their litigation costs from defendants, but consumers who lose a lawsuit only have to pay if they brought the case in bad faith or for purposes of harassment.
The FTC argues that the legal cost provisions of the act are designed to help consumers fight abusive debt collection practices by engaging in, what the government terms, “good faith private enforcement actions.” Advocacy agencies are worried that the Supreme Court’s decision might severely weaken consumer’s ability to sue collection agencies. Oral arguments in the case have been set for Nov. 7.