Lawsuit: Selip and Stylianou Intimidates Consumers with IRS Threats

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A New York man has filed a proposed class action lawsuit against Selip & Stylianou, LLP claiming the debt collector violated federal law by threatening consumers with an intimidating IRS statement in collection letters. The plaintiff says he received a letter from the defendant that stated the following:

“Whenever part of a debt is forgiven as a result of settling a debt for less than the balance owing, the creditor may be required to report the amount of the debt forgiven to the IRS on a 1099C form, a copy of which would be mailed to you by the creditor.”

The suit argues that this statement is misleading because it could imply that any debt forgiveness will be reported to the IRS, when in reality, forgiveness is only reportable under certain conditions. According to the complaint, the defendant “injects the Internal Revenue Service where there is no legal requirement or other obligation to do so.” The suit claims that the statement is meant to “intimidate” consumers into paying off the full amount of their debt and that such threats violate the Fair Debt Collection Practices Act.