Peter applied for a loan at three banks. Peter's application was denied at the first two banks but finally was approved by the third institution. Peter believes that the first two banks denied his application because of his minority status. No

Question

explanation ever was provided by the banks denying Peter's request for funds. After obtaining the loan, Peter soon found himself unable to make the prescribed payments. Peter went into default, causing the bank to turn his case over to a collection agency. The collection agency called him "night and day" and were very abusive in their collection practices. Peter became quite distraught and unable to function at his job. As a result, Peter was soon fired. Peter asks for your advice regarding his legal rights. What is your response?

Answer 1

It is unlawful to discriminate against an applicant for credit on the basis of race, among other criteria. Peter should have been furnished with a written explanation as to why his application was rejected.
The debt collection practices in this case are unreasonable and prohibited by statute. They also may be held to constitute an unreasonable invasion of privacy. In addition, if the debt collection practices constitute extreme and outrageous behavior, it is possible that the tort of intentional infliction of emotional distress has occurred. Because the collection agency violated the Fair Debt Collection Practices Act, an action to recover damages for Peter's physical illness, and the subsequent loss of his job, could be initiated.