Legal Actions Against Banking Discrimination and Abusive Collection Practices in Massachusetts
Introduction
It is difficult to underestimate the role of law in regulating and protecting human and individual rights in modern society. The legal system, which determines the necessity and reality of administering justice and adequate interaction among members of society, relies on the law in its operation. Accordingly, when injustice or a potential violation of rights occurs, the individual uses that system to seek legal redress. This fact is likewise true in the case of Peter from Massachusetts, who has financial problems due to possible instances of discrimination.
Case Description
Peter applied for loans at three banks. The first two denied his applications, which he attributes to his minority status. The third bank approved his loan, but he soon defaulted on payments. The collection agency that took over his case harassed him relentlessly, causing significant distress and leading to his job loss. In his situation, Peter can take several actions aimed at legal efforts to restore rights and seek justice.
Identifying the Issues
To begin with, two major issues that are most obvious should be identified and addressed separately. First is the possibility of discrimination by the first banks that denied the client. The second is the harmful practice of using a collection agency, which is demeaning and abusive.
Discrimination in Banking
The first factor is the Equal Credit Opportunity Act (ECOA), which makes it illegal in the United States to discriminate against loan applicants based on any criteria. Such characteristics include skin color, religion, ethnicity, nationality, gender, disability, or marital status (Griffith, 2023). Thus, Peter’s conviction of minority status as the primary reason for the rejection must have continued and is troubling. Contrary to standard practice, no explanation for the denial was provided, which may indirectly confirm the client’s concern.
Seeking Justice for Discrimination
Peter can file a complaint in seeking justice on the issue of discrimination by banking agencies, employees, or intermediaries. The Department of Justice (DOJ) and the Consumer Financial Protection Bureau, or CFPB, are required by law to accept requests of this type (Zaring, 2021). However, given the need for more evidence, a positive verdict, in this case, is unlikely. In some cases, banks only accept loan applicants with reason or may excuse themselves with lost correspondence or the client’s failure to receive an incoming call with the decision.
Collection Agencies
The second problem, however, is a more obvious and manageable issue. All creditor services and collection agencies in the country are bound and regulated by the Fair Debt Collection Practices Act, or FDCPA (Stănescu, 2021). The purpose of this regulation should be noted to discourage targeted harassment and abuse of the debt collection process. Accordingly, the aggressive policy of debt collectors appears to be a clear violation of the FDCPA concerning Peter because of the harshness and abusiveness of their actions. Based on this, complaints to the same CFPB or the Federal Trade Commission may be filed.
Outcomes of Legal Actions
If the bank discrimination case in the former case has a positive outcome of the investigation, Peter may be entitled to damages, including moral damages, depending on the specific lawsuit. A case against collection agencies that potentially violated the FDCPA could have a similar outcome. As an alternative consideration, Peter may also be advised to seek assistance from nonprofit advocacy organizations for people who have faced voiced issues. Moreover, free consultation with a lawyer on these issues or bankruptcy filing is possible if necessary due to a worsening financial situation.
Conclusion
Thus, in the assessed situation, Peter has several legal options for dealing with injustice and discrimination. Negative experiences of abuse that he has experienced can be compensated through investigations and lawsuits. Moreover, contacting a lawyer or nonprofit organization can help guide a person through the legal system and partially or fully resolve problems. Additionally, compensation for moral damages may be obtained in the event of a positive outcome of the investigation.
References
Griffith, M. A. (2023). AI lending and ECOA: Avoiding accidental discrimination. North Carolina Banking Institute, 27(1), 349–381. Web.
Stănescu, C. G. (2021). Digital debt collection: Opportunities, abuses and concerns. In C. G. Stănescu, & A. A. Gikay (Eds.), Discrimination, vulnerable consumers and financial inclusion (1st ed., pp. 185-205). Routledge. Web.
Zaring, D. (2021). Enforcement against the biggest banks. Journal of Financial Regulation, 7(1), 1–47. Web.