Butto and Houser v. Collecto, Inc. (U.S. District Court, Eastern District of New York, Case No. 2:10-cv-02906(ADS)(AKT))

In a class action complaint, Lemberg & Associates is representing Victoria Butto and Lakesha Houser, who are suing Collecto, Inc. (doing business as EOS/CCA) for unlawful and predatory debt collection practices. The suit alleges that Verizon Wireless turned over Ms. Butto’s debt and that AT&T Mobility turned over Ms. Houser’s debt to Collecto for collection. Collecto sent both women debt collection letters that added 18% in collection fees to the amounts owed. Collecto had made arrangements with Verizon and AT&T that they would receive their payments when Collecto had successfully collected on the debts. If Collecto didn’t collect on the debt, they weren’t entitled to any fees. Because no monies had been recovered at the time Collecto sent the letters, it was not entitled to its collection fees. Collecto therefore misled Ms. Butto and Ms. Houser by creating a false impression that they incurred collection fees and owed that money.

The suit alleges that Collecto violated the Fair Debt Collection Practices Act through the use of deception to collect a debt. The FDCPA says that debt collectors can’t use “false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” It also alleges that Collecto violated the FDCPA by trying to collect an unauthorized amount. The FDCPA says that collectors are prohibited from collecting “any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”

Update: The defendant has moved to compel arbitration.

Update: Collecto’s motion to compel arbitration was denied. If you had a contract with AT&T Mobility and received a debt collection letter from Collecto, please call our office toll-free at 855-301-2100 or complete the form below.

Join the Class Action

If you’ve received a debt collection letter from Collectco that added collection fees to the amount owed, complete the form below or contact our office toll-free at 855-301-2100. We’ll review your case absolutely free and help you understand your options.

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