Three Plaintiffs Sue Northland Group Over Collection Notices

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From Wisconsin comes a proposed class action case filed by three plaintiffs who claim Northland Group, Inc. mailed them collection notices that violated the Fair Debt Collection Practices Act (FDCPA).

Plaintiff One’s allegations pertain to six collection letters from Northland Group that the lawsuit claims are confusing to the least sophisticated consumer. According to the complaint, the first letter to Plaintiff One—Exhibit A, from February 2017, as dubbed by the complaint—contained language referring to possible tax consequences should any portion of the woman’s debt be discharged through cancellation or forgiveness. More specifically, the letter allegedly stated a discharge of debt must be reported to the IRS regardless of whether the amount is subject to tax, as it may need to be included in a debtor’s income. The lawsuit argues there are “substantial exceptions to the tax consequences of the discharge of indebtedness” not mentioned in the notice, most notably a debtor being exempt from the reporting of a discharge if he or she is insolvent or if the debt is under dispute.

“Referring to tax consequences in a collection letter is intimidating and misleading, suggesting to the unsophisticated consumer that failure to pay the debt in full will give rise to problems with the Internal Revenue Service,” the lawsuit asserts.

Continuing with Plaintiff One, the complaint says the woman received five subsequent collection notices—Exhibits B through F—from Northland between May and October 2017. The second-to-last notice, the lawsuit says, extended to Plaintiff One a purported settlement offer that the complaint says called for the plaintiff, via monthly payments, to effectively tender more than her total amount owed.

“Moreover, Exhibit E describes monthly payments of $942.13, but [Plaintiff One’s] account balance is $9,421.29.

If the consumer tendered 10 monthly settlement payments of $942.13, she would send a total of $9,421.30.

Exhibit E states that ‘we will send additional coupons if you request them.’

Thus, the unsophisticated consumer would be induced to tender more than the balance owed unless she made an express request for additional settlement coupons.”

Plaintiff Two claims she received a notice from Northland that contained a “confusing and misleading” settlement offer that the lawsuit says the defendant positioned as a “limited time offer” when, in fact, it would be available to the woman at any time.

“Such false statements are material false statements,” the case reads, “as they impart in the unsophisticated consumer a false belief that he or she must hurry to take advantage of a limited-time opportunity, when in reality, there is no such time limit.”

Plaintiff Three’s claims also center on a settlement offer from Northland, in particular a payment plan that the lawsuit describes as deceptive, misleading and confusing. According to the lawsuit, Northland informed Plaintiff Three was “not obligated to renew” the offer, a statement the woman argues unlawfully imparts a false sense of urgency.