Appellate court reinstates consumer claims against collectors for alleged deception

The Appellate Court of Maryland reversed a lower court’s dismissal of a class action lawsuit alleging violations of the Maryland Consumer Debt Collection Act (MCDCA) and the Maryland Consumer Protection Act (MCPA). The plaintiffs, a class of two individuals, claimed debt collectors filed lawsuits to collect money they knew was not owed, constituting unfair and deceptive practices under Maryland law. The lower court had ruled that the common law litigation privilege barred these claims, providing immunity to the debt collectors for statements made during proceedings. The appellate court held that the litigation privilege does not bar claims under the MCDCA and MCPA against debt collectors. The court indicated that it discerned “nothing in the MCDCA or MCPA to indicate that the General Assembly contemplated that debt collectors could gain litigation immunity inside the courthouse for unfair debt collection practices that are expressly prohibited outside the courthouse.” The court emphasized that the litigation privilege is typically limited to defamation-like claims involving reputational harm and is not intended to shield debt collectors from liability for unfair debt collection practices. To read more click here.