Consumer complaint received 2024-11-03 00:00:00
Product: Debt collection — Auto debt
Issue: Attempts to collect debt not owed — Debt is not yours
Company: Consumer Portfolio Services, Inc.
State: OR

Complaint narrative:
I am filing this complaint against Consumer Portfolio Services , Inc. ( CPS ) for deceptive and misleading debt collection practices, violations of the Fair Debt Collection Practices Act ( FDCPA ) and the Truth in Lending Act ( TILA ), non-compliance with the Uniform Commercial Code ( UCC ), and potential unlawful collection activities in Oregon due to a lack of licensing. CPS has a history of issues with the CFPB, for which they have been fined in the past, indicating a pattern of non-compliance. The inconsistencies in CPS 's communications and failure to respond to my rescission notice demonstrate a disregard for federal consumer protection laws. 

On XX/XX/XXXX, CPS sent a letter denying my credit application, stating they did not extend credit to me for the vehicle purchase. Despite this denial, CPS later issued billing statements demanding payment as though they were the creditor.

Under UCC 3-305, defenses against a holder ( such as a denial of the original credit application ) may limit CPS 's rights to enforce the contract. Their inconsistent communications violate FDCPA provisions against deceptive practices and raise questions about their standing to collect. 

CPSs billing statement, with a due date listed of XX/XX/XXXX, directs payments to " XXXX XXXX XXXX XXXX  '' rather than CPS itself. This discrepancy violates TILAs requirement for transparent disclosure of the true creditors identity. This lack of clarity makes it impossible to determine the rightful party to which the debt is owed, potentially violating UCC 9-210, which mandates proper record-keeping and disclosure of the assignees identity upon request.

Without proof of assignment, CPSs claim as a creditor or assignee is unsubstantiated. Under UCC 3-203, a transferee must demonstrate valid assignment to enforce the instrument. I request that CPS provide documentation of their assignment rights and compliance with TILA and UCC requirements. 

CPS is not licensed as a debt collector or lender in Oregon, as required by state law. Their attempts to collect payments from me without proper licensing could constitute unlawful collection activity under Oregon law and also raise concerns under UCC 9-609, which governs enforcement of secured interests and requires compliance with state regulations. 

I ask that the CFPB investigate CPSs licensing status in Oregon and determine whether they are in compliance with state and federal laws.

By first denying my credit application, CPS forfeited any claim to act as a legitimate creditor under UCC 3-305, as their initial denial is a valid defense against their later claim. Under the Holder Rule ( stated in the contract ), any assignee of this contract is subject to all claims and defenses I could assert against the dealership. CPS can not ignore this rule and later claim holder-in-due-course status when their actions suggest otherwise.

Due to the breach in contract CPS is trying to enforce, I formally sent CPS a Notice of Rescission and Correction, disputing the legitimacy of the contract sent via certified mail XXXX which was received on XX/XX/XXXX. CPS has failed to acknowledge or respond to this notice. According to UCC 3-604, an obligor has the right to cancel a debt instrument under certain conditions, which CPS has disregarded by failing to respond. Their lack of action on my rescission notice highlights their unwillingness to engage in transparent consumer relations. In the recession and correction letter, I made sure that CPS was aware that my initial intent and intent the entire time with regards to the alledged consumer installment contract for personal, family and household goods was to be redeemed in lawful money, thus taking care of any interest or tax due. 

The vehicle in question has been sold, and I have notified the Oregon XXXX of the sale and transfer. CPS no longer has any legitimate interest in the vehicle. I have also rescinded any power of attorney ( POA ) that CPS may or may not have had related to the vehicle, which is documented with the Oregon DMV. Under UCC 9-203, a secured party must have a valid interest in the collateral to enforce a security agreement, which CPS lacks due to the sale, their acknowledgment that they did not lend me or extend to me any loan and it was in fact denied, and breach in contract they are attempting to enforce. 

CPSs continued attempts to enforce a claim or lien on a vehicle they no longer have rights to, due to both the sale and the rescission of POA, are invalid.

CPS has previously been fined by the CFPB for violations of consumer protection laws, which underscores a recurring pattern of non-compliance. Their repeated issues with deceptive practices and misrepresentation of credit relationships suggest that the actions described in my complaint XXXX not be isolated incidents. I urge the CFPB to consider CPSs history and investigate their current practices thoroughly. 

Potential Violations : FDCPA : Misrepresentation of debt ownership, deceptive practices, and attempts to collect without licensing in Oregon. 
TILA : Failure to provide clear disclosures of the creditors identity upon assignment.

UCC : Violations of UCC provisions related to proof of assignment ( 3-203 ), defenses against a holder ( 3-305 ), rescission rights ( 3-604 ), and secured party interest requirements ( 9-203 and 9-210 ).

Company response to consumer: Closed with explanation