Consumer Clarified: Thanks to Our Court of Appeals

In a recent opinion by the North Carolina Court of Appeals, a 3-0 panel held the definition of the term “consumer” under the North Carolina Debt Collection Act (N.C.G.S. 75-50 et seq.) includes persons who are alleged to owe debts.  In Green Tree Servicing LLC v. Locklear two members of a Robeson County family held interest in a manufactured home and became behind in their payments.  The creditor began a campaign of harassing phone calls and threats and questionable (to say the least) communication with the family members which led to litigation and counterclaims. 

In a lengthy opinion which focused almost exclusively on the issue of whether the family members were “consumers” such that they could seek protection under the Act, the Court held that the creditor’s multiple efforts to “..perpetuate the plaintiffs’ impression they were bound by the debt..” made it quite appropriate that the homeowners had consumer status.  Consequently the Court held the trial court had wrongfully dismissed the family members’ counterclaims that the creditor had violated the Act and the case was ordered returned to the trial court level for further proceedings.  In this context “further proceedings” likely will mean the plaintiffs’ continuing their claims against the creditor for multiple violations of the Act.   And from the facts stated in the Court’s opinion the creditor has reason for concern when the case gets back to Robeson County.

The decision in this case should make clear that even if a person does not actually owe a debt, a creditor’s or collector’s ongoing insistence and actions to the contrary could subject the creditor or collector to the North Carolina Debt Collection Act.  The Act, discussed in more detail here, prevents a wide variety of actions by anyone collecting on a debt.  If you are in the midst of an uncomfortable situation regarding a debt you should consult an attorney to see if the Act protects you.


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