Debt Collection Company Fights Off Missouri AG -- Again

Apr 5, 2011 at 3:00 pm
Missouri Attorney General Chris Koster
Missouri Attorney General Chris Koster
Deception? Unfair practices? The Missouri Court of Appeals' Eastern District says those may be A-OK for a Kansas City debt collection company targeted by Missouri Attorney General Chris Koster.

Why? Turns out that, per the court, the statute Koster was using to battle Professional Debt Management LLC simply doesn't apply in this case. Koster had attempted to stop the company from violating the state's Merchandising Practices Act -- but the appellate court agreed with a previous dismissal by the circuit court, saying that the law only protects consumers from unfair practices connected with "the sale or advertisement of merchandise."

And, naturally, a debt collection agency doesn't ever make a sale to a consumer. It only goes after them -- sometimes, allegedly, unfairly and deceptively -- after being hired by a third party hoping to collect.

The unanimous decision was issued earlier today; a spokeswoman for Koster said the agency was reviewing its options and had no comment at this time.

The Better Business Bureau has given Professional Debt Management LLC an F. And Koster's suit, filed in 2009, alleges that the company kept pushing people to pay up -- even when they didn't owe anything. It also allegedly made "coercive threats," including warning its alleged victims that it could garnish their Social Security payments.

But the appeals court has now held that the state's Merchandising Practices Act, or MPA, can't be used to hold the company accountable. As the judges writes,

We acknowledge and commend the State's efforts to aggressively police the marketplace of trade and commerce. With our holding, we do not suggest that the actions alleged in the Petition are not actionable. However, we cannot undertake a legislative role and write into the MPA language that simply does not exist. We do not read the plain language of the MPA to provide that debt collection by a third party as alleged in the Petition is "in connection with" the sale of merchandise, and is included among the activities prohibited by the MPA.
Frankly, based on the judges' remarks, it sounds like this is something the Legislature ought to be looking into -- instead of (ahem) trying to overturn the will of dog-loving voters or targeting immigrants who want to learn how to drive.

Anyone? Anyone?