Recovery of All Monies Paid Under the Contract

[David A. Szwak]

Recovery of All Monies Paid Under the Contract

The Holder Rule does not limit the consumer's recovery to amounts paid to the creditor assignee. The consumer may recover from the creditor assignee for payments made under the contract, regardless of whether the payments were made to the seller or to the creditor assignee. Alduridi v. Community Trust Bank, N.A., 1999 WestLaw 969644 [Tenn. Ct. App. 1999]. The FTC Holder Rule contains one limitation on the right of the consumer to obtain affirmative relief, namely that the affirmative relief may not exceed what the consumer has paid. If the FTC had intended to limit further the rights of a consumer to affirmative relief, it would have been a simple matter to add such additional limitations. Scott v. Mayflower Home Imp. Corp., 363 N.J.Super. 145, 831 A.2d 564 [N.J. Super. L. 2001]. A plaintiff's statutory or common law claim against the creditor for attorney's fees is not subject to the limitation of the FTC Holder Rule. Recovery under the Holder Rule, however, is limited to amounts paid by the consumer under the contract. Recovery for amounts in excess of this, such as a claim for attorney's fees not paid under the contract, must be based on an independent statutory or common law ground. Therefore, where the plaintiff's claim for attorney's fees is based on the seller's misconduct, recovery under the Holder Rule is limited to the amounts paid under the contract. Riggs v. Anthony Auto Sales, Inc., 32 F.Supp.2d 411, 417 [U.S.D.C. W.D. La. 1998] [case holding that "a creditor's derivative liability for seller misconduct under the FTC rule is limited to the amount paid by the consumer under the credit contract"].