Texas-based collection agency Dyck ONeal reportedly has filed an estimated 240 deficiency judgment lawsuits in Palm Beach County, Fla. this year, hoping to collect the mortgage debt that remains after foreclosures are processed.
But a federal lawsuit accuses the agency of violating the Fair Debt Collection Practices Act when it pursues people who had a deficiency judgment entered in Florida, but have moved out of state, according to the Palm Beach (Fla.) Post.
The suit was filed on behalf of borrowers whose wages can be garnished while their assets are seized to help satisfy remaining mortgage debt.
Jacksonville, Fla. attorney Chip Parker of Parker & DuFresne law firm is representing Danella Huthsing in the case. The plaintiff is seeking class-action status for the federal lawsuit.
Huthsing's home was sold at auction in July 2010, after which she moved to St. Louis. Dyck O'Neal said she still owed $91,029 and the agency earlier this year sued to collect that balance.
Huthsing's lawsuit states that the defendants "systemic conduct constitutes actual harm to thousands of individuals who are being forced to defend themselves in distant or inconvenient courts against an unanticipated and unfamiliar debt buyer."
Dyck O'Neal officials could not be immediately reached for comment.
Huthsing's lawsuit is seeking statutory damages only for potential class members. People who join any class action who suffer actual damages can still file individual cases, Parker informed the Post.