The California 5th District Court of Appeals came out with a decision on August 15, 2013. That decision, in People v. Persolve, is an interesting discussion of the litigation privilege.
Here is a good blurb in Enligsh from California Appellate Report:
“A debt collector (and its attorneys) engages in conduct expressly prohibited by both the California and the federal Fair Debt Collection Practices Acts. The Kern County District Attorney brings a civil enforcement action under the unfair competition statute to get them to stop and to obtain restitution of ill-gotten booty.
A righteous action if ever I saw one.
The trial court nonetheless dismisses the action. Holding that everything illegal that the debt collectors might have done was protected by the litigation privilege.
The trial court’s holding makes even less sense to me than it did to the Court of Appeal.”
Here is the background from the appellate court:
“Persolve is a debt collection company. Persolve purchases old, defaulted debt in batches of 1,000 or more accounts at a time, for which it pays pennies on the dollar. Thereafter, Persolve sends a letter to the debtors demanding payment. These letters are sent to the debtors by Persolve’s attorneys, Patti-Jelsvik and [Edit] Alexandryan.
According to the People, the letters Persolve sends to debtors are misleading, unlawfully threaten postjudgment remedies to which respondents are not entitled, and fail to make full disclosures required by the California [Rosenthal] Act and the Federal [Fair Debt Collection Practices] Act. Specifically, the People allege that Persolve violated the Federal Act’s prohibition against false and misleading representations by failing to accurately apprise debtors of the total amount required to settle the account (15 U.S.C. § 1692e); violated the verification requirement by specifying conflicting time periods of both 30 and 10 days for the debtors to respond to letters and by threatening legal action before the expiration of the required 30-day period (15 U.S.C. § 1692g(a)); and violated provisions of the California Act and the Federal Act by threatening to obtain attorney fees that Persolve was not entitled to (15 U.S.C. § 1692e; Civ. Code, § 1788.17). The People further allege that when Persolve filed collection actions in the trial court, it published personal information about the debtors, including Social Security numbers and driver’s license numbers, in violation of the California Act and the Federal Act.” 218 Cal. App. 4th 1267, 1271-1272 (2013)
Let me give you my take on this:
Persolve is a debt collector. They buy debts by the thousands. Edit Alexandryan files lawsuits based on very limited information. Persolve is hoping to win by default with its limited information.
What do I base this on? I have read this case carefully. But I also have half a dozen cases with Persolve currently pending. Edit Alexandryan has done the same thing on each case – filed a lawsuit and then, on the last day discovery is due, she has a paralegal ask for extension so they can “get information from the original creditor.” Of course, Persolve is buying debts from debt collectors who bought them from debt collectors. They are not buying, in my experience, debts from the original creditors. And while that is not required, one would think due diligence would require someone to check with the original creditor before simply filing a lawsuit.
I am going to keep an eye on this case. It will be interesting to see what Persolve does with it as it proceeds. In the meantime, I am going to stress my usual advice: if you are sued by Persolve, contact an attorney immediately. In fact, if you receive a letter from Persolve or Edit Alexandryan, I would talk to an attorney at that time.