Ramona Milan v. Selene Finance, L.P.

Chicago, Illinois, consumer credit lawyers represented the Plaintiff who sued on a Fair Debt Collection Act violation theory.

Ramona Milam is an Illinois homeowner who took out a mortgage loan. Selene Finance acts as the loan servicer, collecting her mortgage payments on behalf
of the lender. When Milam missed payments in 2023, Selene sent her a letter internal practices prevented Selene from acting on the deadline, the letter amounted to a threat intended to panic her into prompt payment. After making a payment, Milam sued Selene in federal court, alleging that the misleading letter violated the Fair Debt Collection Practices Act and Illinois law.

The district court dismissed her claims, finding that Selene was the lender’s assignee and thereby entitled under the original mortgage to notice and an opportunity to cure prior to Milam’s lawsuit. Because Milam’s complaint does not resolve whether Selene was an assignee under Illinois law,threatening the possibility of acceleration and foreclosure if she did not cure her default within 35 days.

Milam alleges that, because a federal regulation and its own internal practices prevented Selene from acting on the deadline, the letter amounted to a threat intended to panic her into prompt payment. After making a payment, Milam sued Selene in federal court, alleging that the misleading letter violated the Fair Debt Collection Practices Act and Illinois law.

The district court dismissed her claims, finding that Selene was the lender’s assignee and thereby entitled under the original mortgage to notice and an opportunity to cure prior to Milam’s lawsuit. Because Milam’s complaint does not resolve whether Selene was an assignee under Illinois law.

AI Overview

Understanding the Fair Debt Collection Practices Act (FDCPA ...

The Fair Debt Collection Practices Act (FDCPA) is a federal law protecting consumers from abusive, unfair, or deceptive debt collection practices by third-party collectors, outlining what they can't do, like harassing you, lying about debt, or contacting you at odd hours (8 a.m. to 9 p.m. is the limit). It empowers you to stop contact in writing and allows you to sue for violations, though it generally doesn't cover the original creditor.

Key Prohibitions for Debt Collectors:

Harassment: No repeated calls to annoy, abuse, or harass; no threats of violence or harm.

Misrepresentation: Cannot falsely claim to be an attorney, government agent, or threaten arrest/jail; cannot lie about the debt amount or legal action.

Unfair Practices: No depositing post-dated checks early, no collecting unauthorized fees, and no using postcards to discuss debt.

Communication Rules: Generally can't call before 8 a.m. or after 9 p.m., can't contact you at work if they know the employer prohibits it, and must contact your attorney instead of you if you have one.

Third-Party Disclosure: Cannot reveal your debt to others (like neighbors, family) unless for location information (e.g., address), and even then, must avoid revealing it's a debt collector.

Your Rights Under the FDCPA:

Right to Verify: You can request written validation of the debt.

Cease Communication: Send a written "cease and desist" letter to stop most contact, though they can contact you once to say efforts are ending or to mention legal action.

Sue for Violations: You can sue debt collectors in state or federal court within one year for breaking the law.

What It Doesn't Cover:

Debts from businesses (e.g., business loans).

Collection efforts by the original creditor (e.g., the store you bought the item from).

Who Enforces It?

The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC).

Reversed.