Patzka v. Viterbo College

[David A. Szwak]

Patzka v. Viterbo College,
917 F.Supp. 654, 107 Ed. Law Rep. 836, W.D.Wis., February 27, 1996

Suit was filed against private college and debt collection agency alleging violations of federal Fair Debt Collection Practices Act and Wisconsin Consumer Act in attempting to collect from student interest and collection fees not permitted by Wisconsin state law on college debt. On student's motion for partial summary judgment on issue of liability and uncontested damages, the District Court, Crabb, J., held that: (1) debt collector's attempt to collect interest and collection fees that were not authorized by state law was violation of Fair Debt Collection Practices Act, entitling student to recover from either college or debt collector amount of interest and collection fees paid; (2) debt collector violated Fair Debt Collection Practices Act by threatening to take legal action upon collection fee that was prohibited by state law; (3) debt collector functioned as agent of college, and thus, debt collector's violations of Wisconsin Consumer Act could be attributed to creditor for purposes of applying two-year statute of limitations; and (4) college violated Wisconsin Consumer Act by attempting and threatening to enforce its right to collect interest and collection fees that were unauthorized under Wisconsin law.
Motion granted.


OPINION AND ORDER


CRABB, District Judge.
In this civil action for monetary relief brought pursuant to the Federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692, plaintiff contends that defendants attempted to collect impermissible interest charges and collection fees on a college debt she incurred as a student. Plaintiff also brings supplemental state law claims pursuant to the Wisconsin Consumer Act, Wis.Stat. §§ 421-427.
Presently before the court is plaintiff's motion for partial summary judgment on the issue of defendants' liability and uncontested damages. I conclude that plaintiff has demonstrated that defendant Security Credit Systems, Inc. violated the Fair Debt Collection Act by attempting to collect interest and collection fees not permitted by state law. I conclude that defendant Viterbo College violated the Wisconsin Consumer Protection Act by charging and attempting to collect interest without fully disclosing these charges to plaintiff and by charging an impermissible collection fee. Therefore, plaintiff's motion for partial summary judgment will be granted.


UNDISPUTED FACTS

Plaintiff resides in McFarland, Wisconsin. Defendant Viterbo College is a private college with its principal place of business in La Crosse, Wisconsin. Defendant Security Credit Systems, Inc. is a corporation organized under the laws of the state of New York. Its principal business activity is the collection of debts.
On or about January 11, 1986, plaintiff was notified of her opportunity to enroll in defendant Viterbo College. Classes began on January 13, 1986. On that day, plaintiff appeared at the college and registered for the first time. She was not told she would be charged any interest or collection fees, was not shown the college handbook and was not told that the handbook contained any terms relating to payment of tuition. Plaintiff did not receive any materials explaining the colleges' payment policy prior to January 13, 1986.
During registration, which had occurred a month earlier, defendant Viterbo College handed out the “Viterbo College Catalog,â€