Current Cases/News

NPR Settles FDCPA Class Action Against Unifund; Class Decertified as to The Credit Store

April 4, 2006

United States District Judge T. John Ward, in the case styled Mary Jo Barnett, John Allen Brookins, and Dewey Jack Crossland, Individually and on Behalf of All Others Similarly Situated, v. Experian Information Solutions, Inc., The Credit Store, and Unifund Corporation, Civil Action No. 2:00CV175, recently approved a class action settlement brought by a class of consumers who alleged violations of the Fair Debt Collection Practices Act. The plaintiffs alleged that the defendants purchased old debts and changed the date of last activity on the accounts such that they could be reported to credit reporting agencies under the Fair Credit Reporting Act. This gave debt collectors leverage to collect obsolete debts.

NPR obtained significant injunctive relief on behalf of the class as to bad debt buyer Unifund, requiring Unifund to cease its practice of changing dates of last activity on consumer accounts. The relief obtained also provides that the issues won by plaintiffs in their motion for summary judgment are res judicata on all future claims between Unifund and any member of the class who later brings a claim for damages. Unifund was also required to post notice of this settlement, along with a statement that it has discontinued its prior practices, on its website: https://resolve.unifund.com.

Bad debt buyer, The Credit Store, filed for bankruptcy protection under Chapter 11 in the early stages of the litigation and shortly thereafter, converted its bankruptcy proceedings to Chapter 7. The Credit Store has not operated as a going concern since those proceedings. NPR obtained an order granting plaintiffs relief from the automatic bankruptcy stay to allow plaintiffs to proceed with litigation against The Credit Store, but only against any insurance proceeds available. However, due to The Credit Store’s limited insurance coverage and bleak financial condition, and the fact that the Fair Debt Collection Practices Act precluded the class from a monetary recovery due to these conditions, the Court made the decision to decertify the class as to The Credit Store. As part of the court’s decertification order, the statute of limitations for individual claims against The Credit Store is no longer tolled by the pendency of the case, and NPR no longer represents the absent class members in connection with these claims.

If you have questions or information regarding this case, please contact Brad Beckworth, Jeff Angelovich or Susan Whatley of Nix, Patterson & Roach.