Debt collection agency sued after threatening to send debtor to jail

SHERMAN - A national debt collection agency is being sued after a bill collector threatened to send a Sherman couple to jail for nonpayment of a debt.

Claiming the bill collector violated the Fair Debt Collection Practices Act, Ernest and Keila Scruggs filed suit against H&P Capital Inc. on May 18 in the Eastern District of Texas, Sherman Division.

According to the lawsuit, one of H&P's representatives placed collection calls to the plaintiffs seeking and demanding payment for an alleged debt.

In March, the collector threatened that a lawsuit would be filed against the Scruggs if they did not pay the alleged debt. The Scruggs also state that the caller threatened to prosecute them and put them in jail if they did not pay the debt.

The defendant is accused of violating the Fair Debt Collection Practices Act by falsely implying that nonpayment of a debt would result in arrest or imprisonment.

H&P Capital is also accused of violating the act by threatening to file a lawsuit even though it did not intend to do so, using deceptive means to collect a debt and for failing to disclose that it is a debt collector attempting to collect a debt.

The plaintiffs are asking for an award of statutory damages, court costs and attorney's fees.

The plaintiffs are represented by Michael S. Agruss of Krohn & Moss in Los Angeles, California. A jury trial is requested.

U.S. District Judge Richard A. Schell is assigned to the case.

Case No. 4:11-cv-00286