In a decision issued on March 22, 2013 by Judge Michael A. Ciaffa in the First District Court of Nassau County, the Court held that where a debt buyer brings litigation to collect on an unpaid debt, that litigation activity may be considered deceptive for the purposes of GBL §349.
GBL §349 declares unlawful deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in New York State. In order to properly plead a GBL §349 claim, a party must allege the following three elements:
1. That the challenged act or practice was consumer-oriented;
2. That the act or practice was deceptive or misleading in a material way;
3. That the plaintiff suffered an injury as a result of the deceptive or misleading act.
In the case at bar, Midland Funding, LLC (represented by Cohen & Slamowitz), a high-volume debt buyer, had sued a consumer for a credit card debt originally owned by Citibank. The defendant retained The Langel Firm to assert defenses and interpose counterclaims on her behalf. In the answer we submitted on the defendant's behalf, we counterclaimed for violations of the FDCPA as well as GBL §349 on the basis that several acts or omissions by Midland Funding constituted deceptive acts and practices under the law.
Ultimately, the court held that if a debt buyer commences a lawsuit and the initiating documents (such as summons and complaint) contain factual allegations that attest to the defendant's liability for the alleged debt where evidence to support such a claim is not readily available or does not exist, that conduct may violate GBL §349. A defendant receiving such litigation documents could reasonably be deceived and such deceptive conduct falls within the scope of GBL §349.
The court held that where a debt buyer commences a lawsuit in good faith and has supporting evidence readily available, that conduct may not be deemed deceptive.
With this decision, The Langel Firm has secured a win for consumers everywhere. If a debt buyer has commenced a lawsuit against you, click here to contact an attorney at The Langel Firm today.