Alaska Supreme Court: Trustee v. Ambridge – Foreclosure is “Debt Collection” under FDCPA

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Alaska Supreme Court: Trustee v. Ambridge – Foreclosure is “Debt Collection” under FDCPA

In Alaska Trustee v. Ambridge, the foreclosure trustee sent the Ambridges a statutorily-required notice of default (NOD) that fully complied with Alaska law. However, the NOD did not state the total amount of the debt as required by the FDCPA for a first communication with the debtor, and was not followed up within five days by a statement of the total amount due. The Ambridges sued both the foreclosure trustee and its owner, who was not personally involved in the sending of the NOD. The Ambridges claimed that the NOD violated the FDCPA and UTPA, even though they had not been harmed or deceived by it in any way. The trial court ruled in favor of the Ambridges, and the Alaska Supreme Court affirmed.

This judicial ruling is significant because the UTPA provides for an award of full attorney fees to a successful plaintiff, which will encourage borrowers’ attorneys to assert violations of the FDCPA or federal laws with similar provisions, such as the Truth in Lending Act. The Ambridge opinion is available at http://www.courtrecords.alaska.gov/webdocs/opinions/ops/sp-7084.pdf.

SOURCE: USFN

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