Class Action: Diaz & Associates Attempted to Collect ‘Invalid’ Debts

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Diaz & Associates, Inc. has been hit with a proposed class action filed by four Virginia consumers who allege the company misrepresented the legal status of their debts and attempted to collect on invalid loans.

The suit focuses on usurious payday loans serviced by CashCall, Inc. that were “challenged” in Hayes v. Delbert Servs. Corp., a previous lawsuit in which the defendants agreed to “adjust to zero all the outstanding debts that were in the defendants’ possession,” including the plaintiffs’ debts. After the settlement, however, Diaz & Associates allegedly continued its collection efforts on the loans.

“Through the use of deceptive practices and false statements, Diaz & Associates collected on loans that were invalid under Virginia law and that it knew or should have known were invalid,” the suit reads.

The case further alleges the defendant made false representations by indicating outstanding balances on the plaintiffs’ credit reports after the loans were voided.