Global Credit & Collection Corp. Hit with Class Action

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Global Credit & Collection Corp. is staring down a proposed class action that claims the Florida-based outfit violated the Fair Debt Collection Practices Act (FDCPA) with its inclusion of a certain tax disclosure in a collection letter to the plaintiff. In the collection notice, the defendant allegedly claimed the forgiveness of the plaintiff’s debt needed to be reported to the IRS. This language, the lawsuit contends, could be understood by the least sophisticated consumer to mean federal regulations mandate that all debt forgiveness, no matter the circumstance, needs to be reported to the IRS. On the contrary, the complaint notes, the defendant’s notice “leaves out the essential element that the reporting of forgiveness of a debt happens only if the principal forgiven exceeds $600, and that reporting of forgiveness of a debt would not happen even if the amount if greater than $600, if the amount forgiven contained interest forgiveness so long as the principal was less than $600.”