Lawsuit: RGS Financial Sends 'Threatening' and 'Misleading' Letters

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RGS Financial, Inc. is the defendant in a proposed class action that claims it violated various provisions of the Fair Debt Collection Practices Act. The letter allegedly contains a settlement offer and a statement regarding IRS reporting requirements for debt forgiveness. According to the suit, this statement implies that the consumer’s acceptance of the settlement offer would result in tax consequences. However, the complaint claims the settlement “could not possibly have been reportable” to the IRS because the amount of the debt forgiven would be less than $600.

In addition to unlawfully threatening consumers, the suit also claims that RGS Financial failed to clearly state the amount of their alleged debts by neglecting to indicate whether interest or fees would be added to the initial amounts in the letters. Even further, the defendant supposedly placed on the back of the letters the consumers’ right to dispute the alleged debts. This required disclosure was “conspicuously absent” from the rest of the provided options listed on the front of the letter, according to the complaint, and would cause the unsophisticated consumer to be “uncertain and confused” as to his or her rights.