Warner, Kaine call for action against abusive debt collections against servicemembers

U.S. Senators Mark Warner and Tim Kaine wrote letters to Secretary of Defense Chuck Hagel, Consumer Financial Protection Bureau Director Richard Cordray, and Federal Trade Commission (FTC) Chairwoman Edith Ramirez calling their attention to recent reports published inProPublica and the Washington Post that detail abusive debt collection practices against servicemembers undertaken by a Virginia-based retailer.

In a joint letter with U.S. Senators Jeanne Shaheen, Richard Blumenthal and Jack Reed, Warner and Kaine asked that Secretary Hagel and Director Cordray investigate these claims, educate servicemembers about these practices and look into potential actionsto ensure active duty servicemembers are able to defend themselves. In a follow up letter with U.S. Senators  Richard Blumenthal, Mazie Hirono, Tom Udall and Ed Markey, Warner and Kaine urged Director Cordray and Chairwoman Ramirez to close a loophole in the Fair Debt Collection Practices Act (FDCPA) that the company has used to file claims in Virginia and win default judgments against servicemembers vulnerable to abusive loan contracts and who may currently be serving in a different state or country.

“According to the report, these retailers seemingly included a provision in the fine print of their contracts that allows the retailers to bring suit against servicemembers in certain jurisdictions in the Commonwealth of Virginia, even though they may not be based there or, in fact, ever have been based there,” the Senators wrote to Secretary Hagel and Director Cordray. “We urge you to fully investigate these claims and educate our servicemembers about their rights and the debt collection practices used by these retailers.”

In the letter, the Senators cited the Servicemember Civil Relief Act (SCRA) that was implemented to protect the legal interests of servicemembers who often face unique financial circumstances as a result of their deployment or service to our nation. Specifically, the Senators said, “the SCRA allows servicemembers to devote their full attention to protecting our country and seeks to prevent unscrupulous actors from taking advantage of financial challenges that may result from a deployment.”   The recent report, however, indicates “that certain retailers may have violated the spirit of this law.”