National Credit Systems Sued Over Allegedly Deceptive Collection Practices

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A proposed class action citing alleged violations of the Fair Debt Collection Practices Act (FDCPA) has been filed against National Credit Systems, Inc. 

According to the suit, the plaintiff received a collection letter from the debt collector in August 2018 after supposedly violating the terms of an apartment lease five years prior. The allegedly unlawful letter stated, in part (emphasis in complaint):

“It is imperative that you give this matter your prompt attention. The above referenced account has been placed with this office for collection. National Credit Systems, Inc. has been authorized to recover debt by way of credit bureau reporting (following this initial 30 day validation period) as well as other remedies available under the law. It is our intention to pursue this debt until resolved.”

By vaguely referring to “other remedies available under the law,” the case argues, the defendant falsely implied it “was authorized to sue [the plaintiff] for the debt, and would do so if the debt was not satisfied quickly.”

The suit goes on to take issue with the letter allegedly “threatening” to report the debt to credit reporting agencies without disclosing that the obligation could only appear on the man’s credit report for a limited time. Pursuant to the Fair Credit Reporting Act (FCRA), the plaintiff’s debt could only be reported through August 2020, or seven years from the date it was incurred, the complaint says. The case argues the letter could mislead the plaintiff into believing the debt would continue to be reported “in perpetuity until such time it was eventually paid.”

“The length of time a debt could appear on his credit report – be it two years, seven years, or in perpetuity – would have considerable influence on an unsophisticated consumer’s response to such notice,” the suit explains, charging that the defendant practiced deceptive collection methods by misleading the plaintiff regarding his credit report.

Further, the notice supposedly referred the plaintiff to the defendant’s website for “helpful videos,” which, the suit charges, pushed false narratives regarding the legal system and miscommunicated consumers’ debt dispute rights. For example, one such video allegedly stated that consumers should have “supporting evidence” if they wish to dispute their alleged debts, which is not required by the FDCPA, the case says.