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If a creditor breaches the peace, there is no right of possession. A breach of the peace constitutes conduct that can reasonably be expected to threaten or harass the consumer.
Plaintiffs bought a vehicle from a dealership in Illinois. Defendant creditor purchased the plaintiffs' retail installment contract for the vehicle. After the plaintiffs fell behind on their payments, the defendant creditor obtained a judgment of replevin and enlisted the repossession agency and its agent to repossess the plaintiffs' vehicle. The plaintiffs sued the repossession agency and its agent for breaching the peace when they repossessed the vehicle, violating the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C.S. § 1692. Plaintiffs also sued the defendant creditor, arguing that it cannot avoid liability under the WCA by acting through its repossession agents.
Did the defendants breach the peace when repossessing the plaintiffs' vehicle?
The illegal repossession violated the WCA which prohibits a debt collector from conduct that can reasonably be expected to threaten or harass the consumer or to claim, attempt, or threaten to enforce a right with knowledge or reason to know that the right does not exist. If a creditor breaches the peace, there is no right of possession. In addition, the defendant creditor had an independent duty under WCA to not breach the peace while taking possession of the collateral. It would defeat the purpose of the statute if it could escape liability under the WCA by using a third party to take possession of the collateral.