Suit Says National Credit Services Misstates Consumers’ Rights in Collection Letters

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National Credit Services, Inc. is facing claims that it failed to comply with state and federal laws by sending deceptive debt collection letters that misstated consumers’ rights. In a proposed class action lawsuit, a New York woman says the defendant sent her a letter containing information about her alleged student loan debt. According to the complaint, the letter stated, “Your creditor or debt collector believes that the legal time limit (statute of limitations) for suing you to collect this debt may have expired.” It allegedly goes on to explain that if a lawsuit is filed against her, the plaintiff may be able to have the suit dismissed due to the debt’s age.

The case argues that student loans held by the U.S. Department of Education do not have a statute of limitations and that the defendant’s statements in the letter were false and misleading. It further claims National Credit Services “misrepresented the legal status of the debt” and provided the plaintiff with “a false sense of security” by leading her to believe that she could not be sued. In response to the defendant’s statements, a reasonable consumer may adjust the prioritization of the debt or “even be less likely to pay it,” the complaint says, which places the letter in legally murky waters under the Fair Debt Collection Practices Act.