Lawsuit: Debt Collectors Leave Out Required Disclosures from Collection Letters

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Capital Management Services, LP and Jefferson Capital Systems, LLC are facing claims that they failed to adhere to the Fair Debt Collection Practices Act in collection letters sent to an Alabama consumer. The plaintiff in the case says she received two letters from the defendants that stated the following:

“As a result of the expiration of the statute of limitations with respect to such debt, legal action may not be brought against the consumer to collect such debt. Any payment by the consumer towards the debt may cause the statute of limitations for such debt to reset.”

The suit argues that the defendants’ demand for payment on a time-barred debt violated the FDCPA for the following reasons:

• it is written in the third person, which is likely to leave the unsophisticated consumer unsure as to whom the statements are addressed;
• the language implies that the defendants have simply chosen not to sue rather than that they cannot sue; and
• it fails to disclose that the defendants cannot “credit report” the debt.

 

The complaint claims the defendants’ purported disclaimer statement was misleading and was unlawfully included in the letter to induce payment from the plaintiff.