Lawsuit: Harris & Harris Coerce Payment on False Pretenses

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Harris & Harris, Ltd. (which does business as Harris & Harris of Illinois, Ltd.) is on the receiving end of a proposed class action that alleges several violations of the Fair Debt Collection Practices Act (FDCPA). The plaintiff claims she received a letter from her creditor informing her that she could “avoid a negative report” with credit reporting agencies by “paying [her] bill in full by the due date.” Almost three months later, she allegedly received a letter from the defendant that stated: “Please note that our office reports some unpaid accounts to the credit bureaus.” The suit argues that these statements are misleading because the plaintiff’s creditor would have already reported the debt to credit reporting agencies before referring the account to the defendant for collection. According to the complaint, the statements were an attempt to coerce the plaintiff into prioritizing this account over others that may have already been reported in order to avoid more negative information on her credit report.

The plaintiff further claims that the defendant’s letter and another she received from the company less than a month later contained a disclosure informing her of a 30-day validation period beginning upon receipt of the letter during which she could dispute the debt or request validation. “The unsophisticated consumer,” the complaint alleges, “would be confused by [the letters], and would be unsure whether the account had been reported to credit reporting bureaus and whether she still had 30 days to dispute the debt.” The threat of negative reporting, the suit explains, overshadows the consumer’s right to dispute the debt. The case additionally argues that the plaintiff could be misled into thinking her validation period began with the receipt of the second letter instead of the first.