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Cetak v. National Credit Adjusters, LLC

United States District Court, D. Nebraska

April 4, 2017

MELISSA L. CETAK, Plaintiff,



         This matter is before the Court on the plaintiff's motion for default judgment (filing 8). The Court finds that the plaintiff has stated a claim for relief under the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq. (EFTA), but not under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA). The Court will give the plaintiff an opportunity to support her FDCPA claim.


         The plaintiff, Melissa Cetak, defaulted on a debt that was transferred to defendant National Credit Adjusters for collection. Filing 1 at 2. The defendant contacted the plaintiff and obtained her personal financial account information in order to initiate a series of electronic fund transfers aimed at satisfying the debt. Filing 1 at 3. But the defendant failed to obtain written authorization from the plaintiff for electronic fund transfers, and therefore could not provide her with a written copy of such an authorization. Filing 1 at 3. Nonetheless, the defendant made several electronic fund transfers from the plaintiff's bank account between May 1 and August 31, 2015. Filing 1 at 3.

         The plaintiff sued the defendant for violation of the EFTA and FDCPA. Filing 1. Service was had on the defendant's registered agent. Filing 5. On the plaintiff's motion, the Clerk of the Court entered the defendant's default. The present motion for default judgment followed. Filing 8.


         When a default judgment is entered, facts alleged in the complaint- except as to damages-may not be later contested. Marshall v. Baggett, 616 F.3d 849, 852 (8th Cir. 2010); Murray v. Lene, 595 F.3d 868, 871 (8th Cir.2010). It remains for the Court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. Id. Therefore, it is incumbent upon the Court to ensure that the unchallenged facts constitute a legitimate cause of action before entering final judgment. Marshall, 616 F.3d at 852-53. And then, even though the allegations of the plaintiff's complaint are admitted, see id., it is still necessary for the Court to determine the plaintiff's damages based upon the evidence. See, Fed.R.Civ.P. 55(b)(2)(B); Brown v. Kenron Aluminum & Glass Corp., 477 F.2d 526, 531 (8th Cir. 1973).

         So, the task for the Court is, first, to consider the allegations of the complaint to ensure that the plaintiff has stated a legitimate cause of action with respect to each of her claims for relief. Then, the Court must consider whether the plaintiff's damages can be determined based on the evidence that has been presented in support of its motion.

         Electronic Fund Transfer Act

          The EFTA provides that "[a] preauthorized electronic fund transfer from a consumer's account may be authorized by the consumer only in writing, and a copy of such authorization shall be provided to the consumer when made." § 1693e. An electronic fund transfer is

any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, direct deposits or withdrawals of funds, and transfers initiated by telephone.

§ 1693a(7). And a "preauthorized electronic fund transfer" is an electronic fund transfer "authorized in advance to recur at substantially regular intervals[.]" § 1693a(10). Any person who fails to comply with the EFTA's requirements with respect to any consumer is liable for the consumer's actual damage and statutory damages of $100 to $1000, in addition to costs and attorney's fees. § 1693m(a).

         The Court finds the plaintiff's allegations sufficient to state a claim for relief under the EFTA. She specifically alleged the defendant's failure to obtain her written authorization, or to provide her with a copy of her written authorization, for preauthorized electronic fund transfers. See filing 1 at 2-3. The Court has given some consideration to whether the plaintiff sufficiently alleged a preauthorized electronic fund transfer, which requires a recurring payment schedule. See, e.g., In re DirecTV Early Cancellation Litigation, 738 F.Supp.2d 1062, 1091 (C.D. Cal. 2010); see also Gillette v. Gaming Entm't, No. 1:15-CV-1040, 2016 WL 4919992, at *4 (S.D. Ind. Sept. 14, 2016). But the plaintiff alleged that the purpose of obtaining her account information was to "initiate a series of electronic funds transfers" and that multiple transfers were made. Filing 1 at 3. This, the Court concludes, was sufficient. See Coover v. Immediate Credit Recovery, Inc., No. 2:14-CV-395, 2014 WL 5823166, at *5 (M.D. Fla. Nov. 10, 2014).

         As noted above, the EFTA authorizes statutory damages, and costs and attorney's fees, to a successful plaintiff. § 1693m(a). The Court finds, in the absence of any mitigating evidence or argument from the defendant, that the plaintiff's request for statutory damages of $1, 000 is appropriate. The Court has also reviewed the plaintiff's evidence of costs and attorney's fees, and finds that the amounts sought are fair and reasonable. See, Blum v. Stenson,465 U.S. 886, 889 (1984); Shrader v. OMC Aluminum ...

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