SHERMAN – A Collin County man has filed a lawsuit in the Sherman Division of the Eastern District of Texas, alleging unfair debt collection practices against several debt collectors and insurance companies.
Colin Cate filed the lawsuit against Evans Law Associates, JTM Capital Management LLC, JH Portfolio Debt Equities LLC, United Debt Holdings, Lexon Insurance Co., International Fidelity Insurance Co, Hartford Casualty Insurance Co. and defendants.
The lawsuit states violations of the Fair Debt Collection Practices Act, Texas Finance Code, invasion of privacy, unreasonable collection efforts and imputed liability. The plaintiff is seeking statutory damages of at least $4,000 as well as reasonable attorney’s fees and costs against each defendant.
Cate is represented by the Wood Form PLLC of Rockwall. A jury trial has been requested.
According to court documents, Cate allegedly had a credit account used primarily for personal, family or household purposes. The credit card was for personal use and was not used for business purposes.
The credit account allegedly went into default with the original creditor, Citibank, before Cate filed the complaint.
Court documents indicate that the account went into default in 2011 and steps were started to collect the balance allegedly owned by Cate.
JH Portfolio Debit Equities LLC purchased the alleged debt from the original creditor and went about collecting the outstanding debt. It contracted with UDH, a third-party debt collector, to collect the alleged debt.
The account was then sold again to JTM Capital Management, who placed the account with Evans Law to collect on the alleged debt. Under that arrangement, Evans Law would earn a percentage of the amount collected.
According to court records, Evans Law made multiple efforts to contact Cate and left several messages on his voicemail.
In 2016, Evans Law left a message for Cate that included contact numbers. However, according to transcripts in court records, the telephone message failed to identify the firm as a debt collector or mention that it was trying to collect a debt. Moreover, it did not tell the company that any information secured from Cate would be used for the purpose of debt collection.
According to court records, the telephone communication described above would “cause the least sophisticated consumer to believe that a lawsuit had been filed or immanently would be filed against plaintiff through the use of words like ‘we have been retained’ and ‘like to prevent this from going any further, becoming a matter of public record, you’ll need to contact our firm or have someone that can speak on your behalf’ and ‘I wish you the best of luck.’”
The firm used similar tactics in ensuing calls. Wording including “I’m trying to make him aware of the situation as we only have a couple days and reach him to get this resolved voluntarily out of court if that is his intention, of course.”
Evans Law intended for these threats to be heard by Cate and because recovery of the alleged balance of the account was barred by the applicable statute of limitation. The company also had no intention of suiting Cate at the time it made the alleged threats, the suit states.
In November 2016, Cate talked to Evans Law and said he no longer wanted to receive calls regarding the account because of the confusing nature of the companies he had found were involved with collections associated with the account.
Cate told Evans Law it was “no longer convenient” to call his home or office line or to call his wife.
“I want this stuff mailed to me,” he said. “This is taking too much of my precious time.”
Despite this request, Evans Law placed at least three more calls to Cate’s cellphone and left voicemails. None of the calls informed Cate that the company was trying to collect a debt.
Evans Law also called Cate’s office and left a message with his secretary. This amounted to an illegal third-party disclosure of the debt, according to court records.
Moreover, court records indicate that Evans Law never provided Cate with notices required by 15 U.S.C. § 1692g(a).
Evans Law did not have a surety bond on file with the Texas Secretary of State, account to Texas state law.
After receiving calls from Evans Law, Cate called JTM regarding the debt and the validity of the firm’s calls. He was told that JTM owned the account and Evans Law was attempting to collect on its behalf.
Cate asked a representative at JTM if the account would be removed from his credit report after he paid the account and JTM told him “In order for you to get it removed off your report you have to request some [inaudible] paid in full letter and when you get that letter you forward it to anyone of the credit reporting agencies and that’ll be your ticket to get it removed.”
According to court records, this was false and deceptive as a “paid in full letter” is not a “ticket” to get an item removed from a credit report.
JTM also told Cate it would investigate JH’s involvement with the account and in a follow-up call it also failed to inform Cate that it was trying to collect a debt, according to transcripts of the calls.
Court records also indicated that JTM never informed Cate of his rights to dispute the account.
According to court records, JTM also allegedly had knowledge that Evans Law did not have a surety bond on record with the state.
Later, Cate spoke to JH and, according to court records, he was told that they owned the account and UDH was trying to collect on its behalf.
However, court records indicated this was deceptive and JH reportedly hoped Cate would pay them and not JTM or Evans Law.
During ensuring calls with UDH, that company also did not inform Cate that it was a debt collector.
Lexon, International Fidelity and Hartford Casualty are surety companies of record for the defendants in the case.