Class Action Alleges Debtsy, Velocity Sent Misleading Debt Collection Letters

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A proposed class action claims Debtsy, Inc. and Velocity Investments, LLC have failed to inform alleged debtors of how to properly dispute their debts.

The 14-page case more specifically alleges Debtsy and Velocity have sent “confusing and contradictory” debt collection letters wherein they falsely implied that debts could be disputed online or over the phone. Per the suit, federal law requires consumers to submit a written notice in order to dispute a debt.

According to the suit, the defendants have violated the Fair Debt Collection Practices Act (FDCPA) by misleading consumers with regard to their right to dispute an alleged debt.

The plaintiff in the case is a Massillon, Ohio resident whose alleged debt to the Bank of Missouri was sold to Velocity, who contracted with Debtsy to collect the purported obligation. Per the lawsuit, the defendants sent the plaintiff in November 2020 a collection letter that informed the woman that she must send “written notification” within 30 days if she wished to dispute the debt.

The collection letter also stated that the plaintiff could “visit our website to pay the debt, dispute the debt, request debt validation, or learn more information about the account,” the case relays. Moreover, the suit says the letter informed the plaintiff that she could “send a letter to Debtsy” at its New York address or call or email the company.

The lawsuit argues that it is “confusing and contradictory” to state that the plaintiff must send written notification of her dispute while also stating without clarification that disputes can be made online. Further, it is “confusing and misleading” to note that the plaintiff can contact Debtsy via letter, a phone call or email, the suit contends.

According to the case, the defendants’ communication “implies that a letter or phone call would be equally effective with regards to a dispute which is simply not true.”

The lawsuit alleges the letter sent by Debtsy on behalf of Velocity was “deceptive and misleading” because it failed to advise the plaintiff of the proper method for disputing a debt—i.e., the submission of a written notice—under the FDCPA. Per the filing, the defendants’ misrepresentations “affected and frustrated Plaintiff’s ability to intelligently respond” to the companies’ collection efforts.

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