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Court Affirms Criminal Penalties in Rhode Island for Not Registering as a Debt Collector

A prisoner holds the bars of a jail cell

A Telephone Consumer Protection Act (TCPA) ruling this week in a federal court in Rhode Island affirmed that state law does allow for criminal penalties for debt collectors who fail to register as such under the state’s laws.

The court found that the plaintiff could sue the defendant in Laccinole v. Gulf Coast Collection Bureau et al because of the state’s law allowing criminal penalties for failing to register as a debt collector. The court denied the defendant’s motion to dismiss due to the plaintiff’s allegations that the defendant failed to register as a collector, writing that “while failure to register as a debt collector does not give rise to a private cause of action, it is a ‘misdemeanor, which exposes the scofflaw to fines up to $2000 or imprisonment for not more than a year, or both.’” The court does note that the plaintiff’s “allegations as to his actual injuries resulting from Gulf Coast’s failure to register are thin.”

The court’s other findings were more favorable to the defendant. The court dismissed the plaintiff’s TCPA claims due to a failure to allege facts demonstrating the use of an autodialer or prerecorded voice. The court also dismissed claims against individual employees of Gulf Coast due to the fact that they do not live in Rhode Island thus resulting in a lack of jurisdiction.

While the ultimate outcome of this case seems likely to favor the defendant, it still serves as a valuable reminder of just how severe the penalties can be for violating some state laws.