FDCPA Complaint Filed Against Nationwide Credit

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A class action over alleged Fair Debt Collection Practices Act (FDCPA) violations has been filed against Nationwide Credit, Inc. The lawsuit alleges the defendant violated federal law by including language in collection letters saying the Internal Revenue Service (IRS) requires certain discharged/canceled debt amounts to be reported to the agency. The language, however, failed to accurately state the applicable IRS code, according to the complaint. Additionally, the lawsuit says the language included in the letter could be misunderstood by the unsophisticated consumer to mean all forgiven debt must be reported to the IRS. Debt forgiveness only needs to be reported to the IRS if the forgiven debt amount exceeds $600, and not at all if a debt amount greater than $600 contains interest.

Under the FDCPA, it is illegal for a debt collector to provide a debt with incomplete, inaccurate or misleading information.