NY Law Firm Sues Four Debt Collectors in One Day Over FDCPA Issues

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A New York law firm on Monday filed separate proposed class action lawsuits against debt collectors GC Services Limited Partnership; Client Services, Inc.; and Midland Credit Management, Midland Funding, LLC and Encore Capital Group, Inc.; and Alltran Financial, LP over alleged Fair Debt Collection Practices Act (FDCPA) abuses.

Dawson v. GC Services Limited Partnership

In this action, the plaintiff claims Houston, Texas debt collector GC Services Limited Partnership sent her a collection notice in which it unlawfully misrepresented her right under the FDCPA to dispute all or some of her debt. At issue in the suit is the specific language the defendant included in the notice that, when read from the perspective of the least sophisticated consumer, the suit says, could be interpreted to mean there was a prior initial written communication sent from GC Service before the plaintiff received the notice attached to the complaint.

“The defendant’s addition of the words ‘AFTER YOUR RECEIPT OF THE GC SERVICES’ INITIAL WRITTEN NOTICE TO YOU CONCERNING THIS DEBT’ to the disclosure required by [the FDCPA] would confuse the least sophisticated consumer concerning the time frame to dispute the debt or seek validation of the debt,” the complaint argues, specifying that the debtor could be led to incorrectly believe he or she had missed an initial communication from the defendant, and that the time to dispute the debt had already passed.

Glick v. Midland Credit Management, Inc., Midland Funding, LLC, and Encore Capital Group, Inc.

The lead plaintiff behind this 14-page lawsuit alleges the above defendants violated the FDCPA by leaving phone messages for consumers in which they failed to provide meaningful disclosure that the calls were from debt collectors attempting to collect a debt, i.e. the identity of the caller and nature of the communication. The plaintiff argues the defendants’ alleged conduct was “deceptive and harassing” under FDCPA guidelines.

Meisels v. Client Services, Inc.

The defendant in the third case is alleged to have deceptively and misleadingly claimed in a collection notice sent to the plaintiff that the forgiveness or discharge of the man’s debt was required to be reported to the IRS per the agency’s regulations. According to the complaint, such language could reasonably lead the least sophisticated consumer to believe a creditor must always report the forgiveness of a debt, when in fact few specific situations exist in which debt forgiveness must be reported for tax purposes. From the lawsuit (emphasis ours):

“Current case law has made clear, that if debt collectors are providing tax advice with regard to the reporting of forgiveness of debt, they cannot provide vague, incomplete and misleading disclosures that leave out the essential element that the reporting of forgiveness of a debt happens only if the principal forgiven exceeds $600, and that reporting of forgiveness of a debt would not happen even if the amount is greater than $600, if the amount forgiven contained interest forgiveness so long as the principal was less than $600.”

Schwartz v. Alltran Financial, LP

The last lawsuit brought Monday claims Alltran Financial, LP broke the law by failing to disclose in a collection notice whether the plaintiff’s debt may increase as a result of accrued interest or fees. Although the plaintiff’s balance was increasing, per the individual’s contract with the original creditor, the lawsuit argues the defendant must still disclose this in collection communications.

Each complaint can be read below.