District Court (Va.) Confirms that FDCPA Does Not Afford Remedy of Extinguishment of Underlying Debt

In Vitullo v. Mancini, 2010 WL 438248 (E.D.Va. 2010) Judge Elliott addressed the question of whether the FDCPA allows for injunctive and declaratory relief that has the effect of cancelling or extinguishing a debt as a remedy for violations of the Act. Judge Elliott held that the FDCPA does not afford such relief and granted the defendant’s motion to dismiss.  Judge Elliott explained

These principles, applied to the FDCPA, point persuasively to the conclusion that Congress did not intend to allow private litigants to seek injunctive relief under § 1692k. In expressly authorizing the FTC to seek injunctive relief under § 1692/(a), while electing not to provide the same relief to private litigants in § 1692k, Congress has clearly indicated through the statutory structure that injunctive relief is an FDCPA remedy exclusive to the FTC. See Weiss v. Regal Collections, 385 F.3d 337 (3rd Cir.2004) (“Most courts have found equitable relief unavailable under the [ FDCPA], at least with respect to private actions.” (citations omitted)). Accordingly, Liliana Vitullo is not entitled to an injunction invalidating the foreclosure of the Capon Bridge property or barring Green Tree from collecting the deficiency owed.  ¶  The same conclusion must be reached with respect to Liliana Vitullo’s request for declaratory relief cancel-ling or extinguishing her debt to Green Tree, albeit on different grounds. To begin with, it is clear that “[t]he plain language of 15 U.S.C.S. § 1692g(b),” the statutory provision at issue in this case, “does not extinguish a debt collector’s right to secure a debt under state law, but instead merely prohibits deceptive collection techniques.” This interpretation of the FDCPA is consistent with the statute’s stated purpose to “eliminate abusive debt collection practices” by imposing substantial monetary sanctions on debt collectors who use “abusive, deceptive, and unfair debt collection practices.” 15 U.S.C. § 1692(a). Notably, the statute provides for the award of “actual damages” and, if warranted, statutory damages not to exceed $1,000, thereby ensuring that a debt collector who engages in abusive, deceptive, or unfair debt collection practices both (i) compensates the aggrieved debtor for any actual loss, and (ii) suffers an additional statutory penalty, where appropriate.FN9 The statute’s remedial scheme does not envision, and indeed does not permit, courts to cancel or extinguish debts as a remedy for FDCPA violations.