Northland Group Accused of Multiple FDCPA Violations

New to ClassAction.org? Read our Newswire Disclaimer

Northland Group Inc. is facing claims that it failed to comply with the Fair Debt Collection Practices Act (FDCPA) in a collection letter it sent. A New York man has filed a proposed class action lawsuit against the debt collector after receiving a letter that noted his “Current Balance Due” but allegedly failed to disclose whether the balance would increase due to interest or other fees. From the complaint:

“The FDCPA requires debt collectors, when notifying consumers of their account balance, to disclose that the balance may increase due to interest and fees; failure to include such disclosures would harm consumers such as the Plaintiff who may hold the reasonable but mistaken belief, that timely payment will satisfy their debts.”

The suit also takes issue with the following statement in the defendant’s letter:

“CITIBANK, N.A. may report a discharge of indebtedness if required by applicable tax law.”

According to the complaint, “it is highly improbable for one who is in debt to have income as a result of settling a debt.” The suit notes that the IRS requires debt forgiveness to be reported only if the principal forgiven exceeds $600. Offering “vague” tax advice without a full explanation of IRS reporting requirements violates the FDCPA, the case argues, because it is likely to mislead the unsophisticated consumer.