Midland Credit Management Sued Over ‘Ambiguous’ Letter

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Midland Credit Management Inc. is facing claims that it violated several provisions of the Fair Debt Collection Practices Act in a collection letter it sent to a Virginia man. The letter allegedly presented the plaintiff with three settlement options and informed him that he could not be sued over the supposed debt because of its age. According to the complaint, the letter further stated, “if you pay your full balance, we will report your account as Paid in Full. If you pay less than your full balance, we will report your account as Paid in Full for less than the full balance.”

The suit first takes issue with the defendant’s alleged failure to inform the plaintiff of his rights regarding the debt’s legal status. Though the letter states he cannot be sued over the debt, it neglects to mention that the statute of limitations will be renewed if he makes any payments, the complaint says. This lack of disclosure is considered “false, deceptive, and misleading conduct,” according to the suit.

The complaint continues by pointing out the supposed ambiguity of the reporting options and claims the letter can be subject to multiple interpretations. It argues that the defendant fails to specify to whom it will report the debt as “paid in full” or “paid for less than the full balance,” noting that the language could refer to the creditor or credit reporting agencies.

Furthermore, the suit argues that Midland Credit Management never defines the amount it will accept as the “full balance,” and that the least sophisticated consumer could interpret the letter to mean that any of the following scenarios could result in the debt collector reporting the balance as “paid in full”:

-only when the consumer pays the entire account balance

-only when the consumer accepts the first settlement offer

-only when the consumer pays off one of the three settlement offers

Lastly, the suit takes issue with the “inherent oxymoron” in the phrase “paid in full for less than the full balance.” It claims the defendant does not clearly specify what conditions will lead to this reporting option or how creditors and credit reporting agencies will interpret it.