Consumer Files FDCPA Class Action Against Gatestone & Co. International

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Gatestone & Co. International Inc. finds itself as the defendant in a Virginia consumer’s proposed class action over suspected violations of federal debt collection law. The plaintiff claims she received a collection notice from the defendant concerning a student loan debt in which she was advised to submit a request in writing should she wish to dispute her obligation. The Fair Debt Collection Practices Act (FDCPA), the lawsuit asserts, allows consumers to dispute debts either orally or in writing. Asking a debtor to submit requests only in writing thereby overshadows the rights granted under FDCPA, the complaint says.

In the same notice, the complaint continues, Gatestone allegedly told the plaintiff debts could not be reviewed for reasons such as:

• “You failed to pay your lender”;
• “You failed to complete your education and/or were dissatisfied with the school you attended”; or
• “You were unable to find employment in the field for which the school prepared you.”

The lawsuit asserts that such statements could lead a consumer to believe he or she was still obligated to pay back a student loan debt “even if they were dissatisfied with the school due to fraud in the inducement by the school.”

“Under federal law, fraud in the inducement by the school would be a defense to the consumer’s obligation to repay the loan,” the suit points out.