Debt Collectors Hit with Lawsuit Over ‘False’ Threats

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Midland Credit Management, Inc. and Midland Funding, LLC are facing a proposed class action lawsuit that claims collection letters they sent to consumers violated state and federal debt collection laws. The plaintiff in the suit says she received four letters from the defendants regarding four separate accounts. The letters allegedly threatened legal action against the plaintiff if the defendants did not receive payment by a specific date. According to the suit, however, the defendants never proceeded with sending the plaintiff’s accounts to an attorney, despite never receiving payments from her. The case argues that the Fair Debt Collection Practices Act prohibits “the threat to take any action that cannot legally be taken or that is not intended to be taken.” Clearly, the defendants never intended to sue the plaintiff, the complaint claims, as evidenced by the absence of litigation against her.

The suit further argues that the defendants, months later, sent four more letters containing similar threats and again failed to follow through with their purported intentions. “The threat of litigation in Midland’s letter is false and misleading and exists only to unfairly scare consumers,” the complaint says.