District Court Says FDCPA Might Apply to Automobile Repo Companies

In Durandisse v. U.S. Auto Task Force, 2009 WL 2337133 (S.D.N.Y. 2009), Judge Chin held that the FDCPA can apply to automobile repossession companies, explaining:

For most provisions of the FDCPA, repossession agencies are not considered “debt collectors.” See Jordan v. Kent Recovery Services, Inc., 731 F.Supp. 652, 656-58 (D.Del.1990). For purposes of Section 1692f(6) of the FDCPA, however, the statute em-ploys a broader definition of the term “debt collector,” and includes “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.”15 U.S.C. § 1692a(6); see also Jordan, 731 F.Supp. at 656-58. ¶   Section 1692f(6) prohibits debt collectors from using “unfair or unconscionable means to collect or attempt to collect any debt, specifically: taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if … there is no present right to possession of the property claimed as collateral through an enforceable security interest.”  15 U.S.C. § 1692f(6)(A).  ¶   This provision “applies to repossession agencies, those businesses which are employed by the owner of collateral to dispossess the debtor of the collateral and return it to the owner.” Ghartey v. Chrysler Credit Corp., No. 92 Civ. 1782(CPS), 1992 WL 373479, at *4 (E.D.N.Y. Nov. 23, 1992) (citing Jordan, 731 F.Supp. 652, 657-59 (D.Del.1990)). ¶  Thus, repossession companies such as USATF may be held liable for violations of Section 1692f(6), but only if they engage in repossession without the “pre-sent right” to do so “via a valid security interest.” Plummer v. Gordon, 193 F.Supp.2d 460, 463-64 (D.Conn.2002); see also Vitale v. First Fid. Leasing Group, 35 F.Supp.2d 78, 81 (D.Conn.1998); Clark v. Auto Recovery Bureau Conn., Inc., 889 F.Supp. 543, 546 (D.Conn.1994); see also Jordan v. Kent Recovery Servs., Inc., 731 F.Supp. 652, 658 (D.Del.1990).  ¶  Failure to establish wrongful repossession precludes liability under the statute. See Plummer, 193 F.Supp.2d at 464 (where complaint fails to establish plaintiff’s superior right of possession, repossession company was not liable under FDCPA for repossessing car in violation of settlement agreement with plaintiff).