Three Debt Collectors Hit with Class Action Case in Wisconsin

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A proposed class action has been filed in Wisconsin against Convergent Outsourcing, Inc.; American Coradius International, LLC; and Pinnacle Credit Services, LLC over alleged violations of the Fair Debt Collection Practices Act (FDCPA) and state consumer protection law.

Per the first plaintiff, the case states the woman’s PayPal-branded credit account fell into default and was charged off prior to August 2016. That month, the lawsuit says, the plaintiff received a collection notice from American Coradius International—Exhibit A—that stated she had an account balance of $731.91. Days after receiving Exhibit A, the plaintiff received a collection notice from Convergent—Exhibit B—stating the balance on her PayPal account was $731.88, according to the suit.

“There is no explanation for why the account balance decreased by three cents,” the complaint reads. “Together, Exhibits A and B are confusing and misleading to the unsophisticated consumer as to the actual account balance.”

Sticking with Exhibit B, the case alleges the notice is, on its face, confusing and misleading in that it states two balances: a “Reduced Balance Amount” and a “Total Balance.” The plaintiff, the lawsuit says, was left unable to determine whether Convergent had been hired to collect the “Total Balance” or if a portion of the account had been forgiven and the company sought only the “Reduced Balance Amount.”

Lastly, the case takes issue with purported settlement offers presented in the first plaintiff’s notice. The lawsuit says that though the payment remittance slip in Exhibit B referred to “Options 2 or 3” and prompted the plaintiff to enter a monthly payment amount, there are no further references made to said options, leaving the plaintiff unsure as to whether some other payment option should have been, but was not, offered in the notice.

Per the second named plaintiff, the complaint claims the man received a collection notice—Exhibit C—over an obligation supposedly owed to Pinnacle that stated a “Total Balance” of $505.71 and a “Reduced Balance Amount” of $202.28. Also included in the notice was a payment remittance slip detailing three purported settlement opportunities, and stating a “Reduced Balance Amount” of $202.28, the complaint explains. The lawsuit alleges Exhibit C is confusing and misleading in that it fails to relay what happens if a consumer tenders the payment amount attached to the second settlement opportunity, characterized as a “reduced balance offer,” but fails to make any other payments, as the option supposedly allows the plaintiff to remit the reduced balance over three months. 

“Upon information and belief, Opportunity #2 is a settlement offer, and any purported balance ‘reduction’ would be wholly illusory if the consumer tendered a $109.57 payment but did not make any additional payments within three months,” the lawsuit claims. “Upon information and belief, if the consumer tendered a $109.57 payment but did not make any additional payments, the ‘reduced balance’ would revert to the ‘Total Balance,’ less a $109.57 credit for the payment received.”