AllianceOne Receivables Management Sued Over Debt Collection Practices

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action out of Pennsylvania claims AllianceOne Receivables Management, Inc. sent debt collection letters to consumers that unlawfully stated that the forgiveness of the debt must be reported to the IRS. According to the complaint, the defendant offered to settle the plaintiff’s initial debt of $915.91 by discharging $320.57 of the balance owed. In truth, however, only debt amounts great than $600 that are forgiven need to be reported to the agency and only in “certain circumstances.” Under the FDCPA, it is illegal to produce any statement in a debt collection letter that could lead the least sophisticated consumer to be needlessly confused or mistakenly believe he or she would have to interact with the IRS. Further, the lawsuit suggests such a statement “can negatively influence someone contemplating bankruptcy.”

The proposed class coves anyone who lives in Pennsylvania who was sent a collection letter from the defendant about a debt owed to Department Store National Bank saying his or her debt forgiveness would need to be reported to the IRS.