Cedar Financial - International Debt Collections and comments for avoiding claims of rental car damage

A friend gave me a letter he received from Cedar Financial, of Calabasas, California. Cedar Financial is a collection agency that specializes in international debt collection. The letter in question was an attempt to collect a little over $300 for a traffic ticket issued in Italy (allegedly, anyway).  The letter attempts to comply with the "g" notice Fair debt Collection Practices Act requirements for initial written communications. It notifies the debtor that he has 30 days to dispute the debt, etc.

Just because the notice complies - or attempts to comply- with the FDCPA doesn't mean the account is subject to the FDCPA though. The FDCPA only applies to "consumer debts", and domestic traffic tickets aren't considered to be consumer debts. I've seen no court decisions on foreign debts, but I checked to see what happened when Cedar Financial was sued by other parties, and as far as I could tell, a handful of suits were all dismissed shortly after filed. Now, as far as I know, those suits could have been settled, or they could have been dismissed because they shouldn't have been filed in the first place.

Note that it makes a difference for whom Cedar is collecting. If they are collecting for a foreign government or municipality, I think it is likely that the FDCPA does not apply, but if they are collecting for a rental car company that paid the ticket and is trying to get reimbursed, then the collector likely is subject to the Fair Debt Collection Practices Act. Claims for debts owed to private toll-way operators, EasyPass and the like should be subject to the Fair Debt Collection Practices Act.

I tried to find any indication that they actually sue on any of these accounts, and I was unable to find any. That doesn't mean that they don't sue. It means that I doubt that they will sue. If they do sue, it could be surprisingly complicated to defend, because they could sue you overseas then ask for confirmation of an overseas judgment.  This will likely mean any attorney you hire (including me) would have to seriously crack the law books to figure out what the law requires.  It looks like they do sometimes report these debts to consumer credit reporting agencies. Here is a case that a consumer filed in US District Court in Florida without an attorney. The other side got the case dismissed.  The consumer might have kept the case going if the consumer had filed a dispute with the credit reporting agencies (credit bureaus) prior to filing suit.  If Cedar Financial is reporting on your credit reports, call a NACA attorney.

If you get a collection letter from Cedar Financial, I suggest you do the following:

1) Send a dispute letter asking for proof of the debt, asking them who hired them and who owns the debt. Also ask for an itemized accounting for how the amount claimed has been calculated.
2) If they call your cell phone, send them written notice that they do not have permission to call your cell phone. Send it in a form you can prove they received it, either fax with confirmation or certified mail.  The purpose of this is to preserve your rights to claim damages for subsequent calls under the Telephone Consumer Privacy Act (TCPA).  

If you receive collection calls on your cell phone from Cedar Financial, and you have notified them not to call your cell phone, contact an attorney in your area with the National Association of Consumer Advocates. You can find one in your area at the NACA website at www.consumeradvocates.org.

What will happen if I don't pay Cedar Financial?  Well, maybe nothing. They may call you. There's a chance that they'll sue you, but I doubt it.  It appears that there is some sort of online database at least in Italy that may make it hard for you to rent a car there again if you have an unpaid ticket.  Such a database if applied in the United States would be subject to the Fair Credit Reporting Act, and you would have the right to dispute the information posted on your record, but different countries would have different laws or no laws at all regarding traffic ticket databases.  If you are a frequent international traveler, you would have more financial incentive to pay the ticket.

What can I do to prevent claims by rental car companies?

If the claim is for unpaid tickets, including Easypass and other tollways, you should actually pay owed debts.  They can be tenacious regarding collections. But if you don't owe the debt, you should send a letter to the collector giving the reasons you don't owe the debt, for example they got your car or license plate number wrong.

Consumers frequently receive claims by rental car companies for damage to rental cars that the consumer never saw.  When I rent a car, I always note that dirt on the car makes it hard to determine if there is damage to the car, and I take digital pictures of the car from all angles when I pick it up and when I drop it off.  It is easy for memories of a vacation to be spoiled by claims of thousands of dollars worth of damage and loss of use to a vehicle that you rented for a week several months ago.  You should always dispute claims for diminished value when they are also claiming the cost of repair to the car's original condition.  That is double-collecting for the rental car company.  If it is a long-term rental, more damage should be included within the ordinary wear and tear for which the rental car company is already being compensated.  If the damages claimed are significant, consider talking to a NACA lawyer before responding.  If you are in Indiana or you rented the car in Indiana, I would be happy to help you.

If you want more information on disputing a ticket or fine that you received in Italy, check out this webpage. I can't vouch for its accuracy, but I don't have anything better.