Alltran Financial Sued Over 'Intimidating' Debt Collection Letter

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Alltran Financial, LP, formerly known as United Recovery Systems, LP, is the defendant in a proposed class action that alleges violations of the Fair Debt Collection Practices Act. The plaintiff claims that Alltran sent her a debt collection letter on behalf of Citibank. According to the complaint, the letter contained a settlement offer and informed its recipient that Citibank would report “any discharge of indebtedness” required by the Internal Revenue Service (IRS). The plaintiff says she was intimidated by this statement and felt that she would “get into trouble” with the IRS if she accepted the settlement offer. The suit argues that the letter was “deceptive and misleading” because Citibank would not be required to report any discharge of indebtedness to the IRS in the plaintiff’s case.

“Defendant’s gratuitous inclusion of the IRS statement in its letter was meant by the defendant to scare and intimidate the plaintiff and the least sophisticated consumer to pay more of the debt than necessary in an effort to avoid involvement of the IRS in the settlement of the debt,” the complaint says.