Suit against Resurgence Financial

I have prepared a suit against Resurgence Financial, LLC for their willful violations of the FDCPA in pursuing my debt.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISCTRICT OF ILLINOIS

EASTERN DIVISION

>>NAME OMITTED<<,
Plaintiff,

vs.

RESURGENCE FINANCIAL, LLC.
Defendant.

COMPLAINT

INTRODUCTION

1. Plaintiff >>NAME OMITTED<< brings this action to secure redress from unlawful credit and collection practices engaged in by defendant Resurgence Financial, LLC. Plaintiff alleges violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ( “ FDCPA ” ). The FDCPA broadly prohibits unfair or unconscionable collection methods; conduct which harasses, oppresses or abuses any debtor; and any false, deceptive or misleading statements, in connection with the collection of a debt. Furthermore, it requires debt collectors to provide debtors with certain information within statutory time requirements. It also prohibits debt collectors from charging excessive and/or unauthorized charges. 15 U.S.C. §§ 1692d, 1692e, 1692f and 1692g.

JURISDICTION AND VENUE

2. This Court has subject matter jurisdiction under 15 U.S.C. §1692k (FDCPA), 28 U.S.C. §1331 (general federal question) and 28 U.S.C. §1337 (interstate commerce).

3. Venue and personal jurisdiction in this District are proper because defendant’s collection communications were received by plaintiff within this District, and defendant is located within this District.

4. Plaintiff >>NAME OMITTED<< is an individual who resides in Oak Park, IL, within the Northern District of Illinois.

5. Plaintiff is a “ consumer ” within the meaning of the FDCPA in that the defendant seeks to collect from him a purported debt incurred for personal, family, or household purposes.

6. Defendant Resurgence Financial, LLC is an Illinois limited liability corporation with its principal place of business located at 4100 Commercial Ave., Northbrook, IL 60062.

7. Resurgence Financial, LLC acts as a collection agency and also engages in the business of buying bad debts allegedly owed by consumers for a small fraction of face value and enforcing the debts against the consumers. According to a press release found on the internet, “ Resurgence Financial, LLC is the preeminent purchaser and collector of defaulted Illinois credit card receivables. The company is able to recreate cash flow … by using an advanced litigation strategy. Resurgence Financial plays an instrumental role in the credit cycle by holding debtors accountable for their lawful credit card obligations and thereby helping to preserve the integrity of the credit system in the United States. “

8. Defendant Resurgence is a debt collector within the meaning of 15 U.S.C. §1692a(6) because it acquires debts in default at the time of purchase for the purpose of collecting them. The original creditors do not retain any interest in the debts.

9. Resurgence is not and has never been chartered or regulated as a bank, savings and loan association, or credit union.

10. Resurgence does not hold and has never held a license under the Illinois Consumer Installment Loan Act or Illinois Sales Finance Agency Act.

11. Resurgence is not and has never been a lender. It does not extend credit.

12. On information and belief, all accounts Resurgence attempts to collect are purportedly in default when acquired. On information and belief, they pay less than 10 cents on the dollar for them, and acquire them solely for the purpose of collecting them rather than for the purpose of extending credit. They do not extend new credit on the debts in any manner.

13. Resurgence does not send monthly statements to debtors, as is required of a “ lender ” under §4.2 of the Illinois Interest Act, 815 ILCS 205/4.2, or follow any of the other procedures required of a “ lender ” under that section. They also do not comply with and of the corresponding provisions of the Truth in Lending Act and Regulation Z (12 CFR 226).

14. Bad debt buyers which fit the description in paragraphs 8-13 can be considered as “ unregulated entities. ”

15. On information and belief, Resurgence performs all of its collections in- house. That is, Resurgence does not contract with any third party collection agencies to perform collection activities on its accounts.

16. Resurgence employs at least one attorney on its staff so that it may litigate and represent itself in lawsuits which it files against its purported debtors.

FACTS

17. Prior to March 2006, plaintiff had a defaulted credit card which was issued and serviced by Chase Manhattan Bank.

18. Between March 10, 2005 and November 7, 2005, two separate collection agencies sent notices to the plaintiff, on behalf of Chase Bank, indicating a debt owed in the amount of $1373.30. These notices are attached as Exhibit A, Exhibit B, and Exhibit C, respectively.

19. Exhibit C was the last correspondence in regards to the debt that the plaintiff received, before defendant Resurgence purchased the debt.

20. On information and belief, sometime after January 31, 2006, Resurgence acquired >>NAME OMITTED<< purported credit card debt after it was supposedly in default.

21. On or about June 5, 2006, Resurgence sent plaintiff the letter attached as Exhibit D.

22. The letter made reference to the alleged debt originally owed to Chase Bank and indicated that Resurgence was the Assignee of said debt. The letter also stated Resurgence would collect nonpublic personal information about the plaintiff in connection with the debt. However, the letter did not indicate the amount of the debt; nor did the letter disclose that Resurgence was a debt collector, or that it was actually attempting to collect the debt.

23. Exhibit D was the initial letter plaintiff received from defendant regarding the debts therein described.

24. On information and belief, Exhibit D was the initial letter defendant sent plaintiff regarding the debt described therein.

25. On information and belief, Exhibit D represents a form letter intended for use by Resurgence as the initial letter it sends to a consumer.

26. On or about July 3, 2006, Resurgence sent plaintiff another collection letter attached as Exhibit E.

27. Exhibit E was the second letter plaintiff received from defendant regarding the debts described therein, which was drafted 28 days after the initial communication.

28. On information and belief, Exhibit E was the second letter defendant sent to plaintiff regarding the debts therein described.

29. On information and belief, Exhibit E represents a form letter intended for use by Resurgence as the second letter it sends to a customer.

30. The collection letter sought to collect a defaulted debt which it purchased from Chase Bank, amounting to $1801.88.

31. The letter also contained notices which provided, in part, that: 1) the debt would not be assumed to be valid if the plaintiff disputed any portion of the debt within 30 days; and 2) if the plaintiff notified the defendant, in writing, within 30 days, that any portion of the debt was disputed, then it would obtain verification of the debt and mail a copy of the verification to the plaintiff.

32. The notices referenced in paragraph 31 are a required disclosure that debt collectors must provide under 15 U.S.C. §1692g(a).

33. On information and belief, $1373.30 represents the balance on the account when Resurgence acquired it, which was no earlier than January 31, 2006 and no later than March 3, 2006.

34. Defendant’s purported balance of $1801.88 represents $428.58 in additional charges it added to the account after acquiring it. On information and belief, such charges can only be assumed to be “ interest charges. ”

35. On July 17, 2006, plaintiff sent a letter to Resurgence attempting to settle the debt for the sum of $1103.59. The letter is attached as Exhibit F.

36. In the letter, plaintiff also alleged that Resurgence was not authorized increase the balance by such additional charges, and disputed that portion of the debt: “ In the absence of your acceptance of the above offer, please be advised that I hereby dispute the validity of such debt on the following basis …. Resurgence has caused the account balance to become increased by $428.58 within the last 4 months…. ” Plaintiff also requested a validation of the account, including a calculation explaining the balance owed.

37. The right for a consumer to dispute a debt or any portion of a debt, and the right for a consumer to request a validation of the debt, is created by 15 U.S.C. §1692g(b), which requires a debt collector to cease collection until they provide a verification of the debt, so long as the consumer notifies the collector of the dispute, in writing, within 30 days of receiving the notice outlined in 15 U.S.C. §1692g(a).

38. Plaintiff notified Resurgence of the disputed portion of the debt, in writing, within 30 days by mailing his letter via certified US mail, return receipt requested, on July 17, 2006.

39. Defendant received the dispute and request for verification on July 19, 2006. A copy of the return receipt is attached as Exhibit G.

40. Plaintiff did not receive the verification of debt as requested, or any further response from Resurgence.

41. On information and belief, defendant made no effort to verify the debt.

42. Notwithstanding the fact that the debt was disputed, on August 24, 2006, Resurgence filed in the Circuit Court of Cook County a lawsuit styled Resurgence Financial, LLC v. >>NAME OMITTED<<, No. 2006 M1 >>OMITTED<<, attempting to collect on the debt. The lawsuit is still pending.

COUNT I – VIOLATION OF 15 U.S.C. § 1692e(11)

43. Plaintiff incorporates paragraphs 1 through 42.

44. Section 1692e of the Fair Debt Collection Practices Act provides, in relevant part:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: …
(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, …

45. Defendant violated 15 U.S.C. § 1692e(11) by sending an initial communication (Exhibit D) to the plaintiff without disclosing that it was a debt collector in the process of collecting on an alleged debt.

COUNT II – VIOLATION OF U.S.C. § 1692g(a)

46. Plaintiff incorporates paragraphs 1 through 42.

47. Section 1692g(a) of the Fair Debt Collection Practices Act provides, in relevant part:

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing -- (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor. …

48. By virtue of an initial communication having been made on June 5, 2006 (Exhibit D), plaintiff was obligated to send the notices required by 15 U.S.C. § 1692g(a), within 5 days of such communication.

49. Defendant sent the required notices (Exhibit E) twenty-eight days after the initial communication, on July 3, 2006.

50. Defendant ’ s failure to send to the required notices within 5 days of the initial communication is a violation of 15 U.S.C. § 1692g(a).

COUNT III – VIOLATION OF U.S.C. § 1692f(1)

51. Plaintiff incorporates paragraphs 1 through 42.

52. Section 1692f of the Fair Debt Collection Practices Act provides, in relevant part:

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: (1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law. …

53. On information and belief, $1373.30 represents the balance on the account when Resurgence acquired it, which was no earlier than January 31, 2006. Defendant ’ s letter (Exhibit E) represents $428.58 in interest added by Resurgence through July 3, 2006. In order for 5 months interest on $1373.30 to amount to $428.58, the rate would have to exceed 50%.

54. Under Illinois law, an unregulated entity cannot enter into an agreement to charge more than 9% simple interest and cannot charge more than 5% simple interest in the absence of an agreement.

55. Section 5 of the Interest Act, 815 ILCS 205/5, provides:

205/5. Greater rate of interest; prohibition
§ 5. No person or corporation shall directly or indirectly accept or receive, in money, goods, discounts or thing in action, or in any other way, any greater sum or greater value for the loan, forbearance or discount of any money, goods or thing in action, than is expressly authorized by this Act or other laws of this State.

56. Section 2 of the Interest Act provides:

205/2. Interest rate; creditors
§ 2. Creditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner's knowledge; and on money withheld by an unreasonable and vexatious delay of payment. In the absence of an agreement between the creditor and debtor governing interest charges, upon 30 days' written notice to the debtor, an assignee or agent of the creditor may charge and collect interest as provided in this Section on behalf of a creditor.

Resurgence is not acting on behalf of any creditor, but solely on behalf of itself.

57. Section 4 of the Interest Act, 815 ILCS 205/4, provides:

§ 2. General interest rate. (1) In all written contracts it shall be lawful for the parties to stipulate or agree that 9% per annum, or any less sum of interest, shall be taken and paid upon every $100 of money loaned or in any manner due and owing from any person to any other person or corporation in this state, and after that rate for a greater or less sum, or for a longer or shorter time, except as herein provided.

58. The only provision that could possibly confer authority to charge more than 5% or 9% on a credit card is §4.2 of the Interest Act, 815 ILCS 205/4.2, which allows “ lenders ” and certain regulated entities to charge higher rates:

§ 4.2. Revolving credit; billing statements; disclosures.
On a revolving credit which complies with subparagraphs (a), (b), (c), (d) and (e) of this Section 4.2, it is lawful for any bank that has its main office or, after May 31, 1997, a branch in this State, a state or federal savings and loan association with its main office in this State, a state or federal credit union with its main office in this State, or a lender licensed under the Consumer Finance Act, the Consumer Installment Loan Act or the Sales Finance Agency Act, as such Acts are now and hereafter amended, to receive or contract to receive and collect interest in any amount or at any rate agreed upon by the parties to the revolving credit arrangement. It is lawful for any other lender to receive or contract to receive and collect interest in an amount not in excess of 1 1/2% per month of either the average daily unpaid balance of the principal of the debt during the billing cycle, or of the unpaid balance of the debt on approximately the same day of the billing cycle. If a lender under a revolving credit arrangement notifies the debtor at least 30 days in advance of any lawful increase in the amount or rate of interest to be charged under the revolving credit arrangement, and the debtor, after the effective date of such notice, incurs new debt pursuant to the revolving credit arrangement, the increased interest amount or rate may be applied only to any such new debt incurred under the revolving credit arrangement. For purposes of determining the balances to which the increased interest rate applies, all payments and other credits may be deemed to be applied to the balance existing prior to the change in rate until that balance is paid in full. The face amount of the drafts, items, orders for the payment of money, evidences of debt, or similar written instruments received by the lender in connection with the revolving credit, less the amounts applicable to principal from time to time paid thereon by the debtor, are the unpaid balance of the debt upon which the interest is computed. If the billing cycle is not monthly, the maximum interest rate for the billing cycle is the percentage which bears the same relation to the monthly percentage provided for in the preceding sentence as the number of days in the billing cycle bears to 30. For the purposes of the foregoing computation, a "month" is deemed to be any time of 30 consecutive days. In addition to the interest charge provided for, it is lawful to receive, contract for or collect a charge not exceeding 25 cents for each transaction in which a loan or advance is made under the revolving credit or in lieu of this additional charge an annual fee for the privilege of receiving and using the revolving credit in an amount not exceeding $20. In addition, with respect to revolving credit secured by an interest in real estate, it is also lawful to receive, contract for or collect fees lawfully paid to any public officer or agency to record, file or release the security, and costs and disbursements actually incurred for any title insurance, title examination, abstract of title, survey, appraisal, escrow fees, and fees paid to a trustee in connection with a trust deed.

(a) At or before the date a bill or statement is first rendered to the debtor under a revolving credit arrangement, the lender must mail or deliver to the debtor a written description of the conditions under which a charge for interest may be made and the method, including the rate, of computing these interest charges. The rate of interest must be expressed as an annual percentage rate.

(b) If during any billing cycle any debit or credit entry is made to a debtor's revolving credit account, and if at the end of that billing cycle there is an unpaid balance owing to the lender from the debtor, the lender must give to the debtor the following information within a reasonable time after the end of the billing cycle:

(i) the unpaid balance at the beginning of the billing cycle;

(ii) the date and amount of all loans or advances made during the billing cycle, which information may be supplied by enclosing a copy of the drafts, items, orders for the payment of money, evidences of debt or similar written instruments presented to the lender during the billing cycle;

(iii) the payments by the debtor to the lender and any other credits to the debtor during the billing cycle;

(iv) the amount of interest and other charges, if any, charged to the debtor's account during the billing cycle;

(v) the amount which must be currently paid by the debtor and the date on which that amount must be paid in order to avoid delinquency;

(vi) the total amount remaining unpaid at the end of the billing cycle and the right of the debtor to prepay that amount in full without penalty; and

(vii) information required by (iv), (v) and (vi) must be set forth in type of equal size and equal conspicuousness.

(c) The revolving credit arrangement may provide for the payment by the debtor and receipt by the lender of all costs and disbursements, including reasonable attorney's fees, incurred by the lender in legal proceedings to collect or enforce the debt in the event of delinquency by the debtor or in the event of a breach of any obligation of the debtor under the arrangement.

(d) The lender under a revolving credit arrangement may provide credit life insurance or credit accident and health insurance, or both, with respect to the debtor and may charge the debtor therefor. Credit life insurance and credit accident and health insurance, and any charge therefor made to the debtor, shall comply with Article IX 1/2 of the Illinois Insurance Code, as now or hereafter amended, and all lawful requirements of the Director of Insurance related thereto. This insurance is in force with respect to each loan or advance made under a revolving credit arrangement as soon as the loan or advance is made. The purchase of this insurance from an agent, broker or insurer specified by the lender may not be a condition precedent to the revolving credit arrangement or to the making of any loan or advance thereunder.

(e) Whenever interest is contracted for or received under this Section, no amount in addition to the charges authorized by this Act may be directly or indirectly charged, contracted for or received whether as interest, service charges, costs of investigations or enforcements or otherwise.

(f) The lender under a revolving credit arrangement must compute at year end the total amount charged to the debtor's account during the year, including service charges, finance charges, late charges and any other charges authorized by this Act, and upon request must furnish such information to the debtor within 30 days after the end of the year, or if the account has been terminated during such year, may give such requested information within 30 days after such termination. The lender shall annually inform the debtor of his right to obtain such information. (g) A lender who complies with the federal Truth in Lending Act, amendments thereto, and any regulations issued or which may be issued thereunder, shall be deemed to be in compliance with the provisions of subparagraphs (a) and (b) of this Section.
...

59. Since Resurgence is not a lender or regulated entity specified in §4.2, it had no authority to charge or receive interest at more than 5% per annum simple interest on a credit card debt which it purchases, unless the account agreement provides for a reduction in rates by notice to not more than 9%, and the procedures in the account agreement were followed.

60. The fact that a bad debt buyer may purchase the rights of its assignor does not alter this conclusion. A “ sales finance agency ” , referred to in §4.2 of the Interest Act, is by its very nature an assignee of consumer paper. Yet, it needs a license from the Department of Financial Institutions to charge more than 9% interest on a credit card debt.

61. Defendant thereby violated 15 U.S.C. § 1692 f(1) by charging and attempting to collect interest at rates only permitted to a regulated entity.

COUNT IV – VIOLATION OF U.S.C. § 1692g(b)

62. Plaintiff incorporates paragraphs 1 through 42.

63. Section 1692g(b) of the Fair Debt Collection Practices Act provides, in relevant part:

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, … the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt …

64. Defendant violated 15 U.S.C. § 1692 g(b) when, after learning that the plaintiff disputed the debt, it continued to file suit in the circuit court without making an effort to verify the debt.

WHEREFORE, Plaintiff requests that the Court enter judgment in favor of Plaintiff >>NAME OMITTED<< and against Defendant Resurgence Financial, LLC for:

(1) Actual damages in an amount to be proven at trial;
(2) Statutory damages under 15 U.S.C. § 1692k;
(3) Litigation expenses and costs of suit;
(4) Such other and further relief as the Court deems appropriate.

>>NAME OMITTED<<