Class Action Claims General Revenue Corporation Demanded Unlawful Collection Fee

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General Revenue Corporation is facing a proposed class action over potential Fair Debt Collection Practices Act (FDCPA) infractions. The plaintiff in the case, a New York woman, claims she received a debt collection letter from the defendant that included her principal balance and a “collection cost balance,” which represented a 30 percent collection fee the defendant added onto her purported obligation as its “anticipated compensation” for collecting the debt. The lawsuit argues that up to that point, the defendant had not yet collected any of the plaintiff’s principal amount and was therefore not entitled to any collection fee.

Further, the charges “bear no relation to, and are substantially greater than costs actually incurred” by the defendant or the plaintiff’s creditor to collect the debt, the case says. The lawsuit claims the defendant’s letter was deceptive in that it demanded “an illegal and unauthorized” fee and misrepresented the amount of debt the plaintiff supposedly owed.