San Jose Bankruptcy & Fair Debt Collection Practices Act Lawyer Blog

Opal V. Bate filed a debt collection harassment lawsuit against Wells Fargo. His lawsuit alleged that Wells Fargo violated debt collection laws by:

• continuing to communicate with him despite that fact the bank knew he was being represented by legal counsel,
• making collection phone calls to him before 8.a.m. and after 9 p.m., and
• by repeatedly contacting him in a harassing manner

A federal judge refused to dismiss the lawsuit against Wells Fargo. Bate v. Wells Fargo, 2011 Bankr. LEXIS 2293 (M.D. FL 2011).

Wells Fargo argued that Florida collection laws were trumped by federal law; the National Banking Act, to be more specific. The judge ruled that the National Banking Act did not trump, or pre-empt, the State of Florida's collection laws.

The Federal Court Judge explained the history of debt collection laws in the United States, stating:

"Following World War II there was an explosion of consumer credit in the United States. With an increase in debts, consumers were faced with the problem of how to pay their debts, and creditors were faced with the problem of how to collect their money. This led to a corresponding problem of an increase in third-party debt collectors representing numerous types of creditors: "hospitals, general retailers, credit unions, colleges, department stores, utilities, banks, commercial or wholesale accounts, medical
clinics, and newspapers." The techniques used by creditors and third-party debt collectors
ranged from friendly coercion to blatant harassment"...Debtors who were abused by outrageous debt collection practices were left to common-law tort remedies."

However, the common law tort remedies most states had were often not adequate to address such a unique problem. Thus, the federal court said, "Due to the increase in debt collection abuses and the inadequacy of the common-law tort remedies, in the late 60's and early 70's, the states recognized the need for consumer protection legislation in the area of debt collection. Most states enacted consumer protection laws aimed at debt collection practices. In Florida the FCCPA was enacted in 1972 to address these very concerns."

But, even the collections laws enacted by the states were not always effective, especially when collectors made contact with consumers over state lines. So, the U.S. Congress also saw the need to pass a federal law that regulated debt collectors. In 1978 Congress passed the Fair Debt Collection Practices Act ("FDCPA") in 1978."

While the federal Fair Debt Collection Practices Act regulated collection agencies, and not original creditors like Wells Fargo, several states, like Florida, California, Texas, Illiniois, Massachusetts and West Virginia, have state laws very similar to the federal FDCPA. Thus, creditors collecting in those states must abide by collection laws or risk being sued if they abuse, harass or deceive a consumer.

Certain states, like California have state laws that regulate creditors and debt collectors, and incorporate the federal law above. See California Civil Code 1788 et seq., California Civil Code 1788.17, Alkan v. Citimortgage, 336 F. Supp. 2d 1061 (N.D. Cal. 2004), and Gonzales v. Arrow, (9th Cir., September 23, 2011).

Thus, creditors, like Wells Fargo, attempting to collect debts here in California must abide by these laws (the California Fair Debt Collection Practices Act) and cease communicating with consumers once they know the consumers are represented by a lawyer. These laws also say a creditor cannot make repeated and continuous calls in an attempt to collect a debt, or call a consumer at a time known to be inconvenient.

Numerous Consumers Have Alleged They Were Abused or Mislead by Wells Fargo

This is not the first time Wells Fargo has been sued for unlawful collection practices. Wells Fargo has been sued multiple times for unlawful collection practices: For a list of some of the California cases see below:

• Marseglia v. Wells Fargo, Case #7-2010-00051655-CU-PO-NC, April 12, 2010 (San Diego Superior Court, California),
• Vanags v. Wells Fargo, May 7, 2009 (San Diego Superior Court, California),
• Ibarra v. Wells Fargo, Case #08-cv-01966-WQH-RBB, October 24, 2008 (S.D. Cal), Serrano v. v. Wells Fargo Auto Finance, Case # 09-00118008, January 12, 2009 (Orange County Superior Court, California),
• Sokolik v. Wells Fargo, Case #63710, June 11, 2010 (Tehama Superior Court, California),
• Rathbun v. Wells Fargo, Case #CLJ 494554, April 29, 2010, (San Mateo Superior Court, California),
• Adams v. Wells Fargo, 08-CECL-08302, August 4, 2008 (Fresno Superior Court, California),
• Baker v. Wells Fargo, Case# 37-2010- 00066030, February 10, 2011 (San Diego Superior Court, California),
• Ballard v. Wells Fargo, Case #149451, February 8, 2010 (Butte County Superior Court, California),
• Barnett v. Wells Fargo, Case# 166285, May 28, 2009 (Shasta County Superior Court, California),
• Cole v. Wells Fargo, August 5, 2010 (San Francisco Superior Court, California),
• Devlin v. Wells Fargo Bank, (Contra Costa County Superior Court, California),
• Gil v. Wells Fargo, Case# L10-01074, February 2, 2010 (Los Angeles Superior Court, Califonria),
• Gwaltney v. Wells Fargo, 09-cv-6272, September 14, 2009 (Amador Superior Court, California),
• Mage v. Wells Fargo, Case# 09-00860, February 26, 2009 (Los Angeles County Superior Court, California),
• Masterton v. Wells Fargo Auto, Case# BC 422200, September 29, 2009 (Los Angeles Superior Court, California),
• Meeks v. Wells Fargo, 09K-11048, June 3, 2009 (Los Angeles Superior Court, California),
• Rathbun v. Wells Fargo, CLJ 494554, April 29, 2010 (San Mateo Superior Court, California),
• Babida v. Wells Fargo, 110-cv-184728 (Santa Clara Superior Court, California).