WV Man Alleges Sentry Credit, JH Portfolio Debt Equities Stated False Tax Information

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A proposed class action case filed by a West Virginia consumer claims Sentry Credit, Inc. and JH Portfolio Debt Equities, LLC, one of the country’s largest investors in unpaid and charged-off debts, mailed the plaintiff a collection notice that included “purposely confusing, false, fraudulent and misleading” language concerning a purported requirement to report the man’s debt forgiveness to the IRS.

According to the lawsuit, the collection notice, in which Sentry offered to settle the plaintiff’s debt for less than the total owed, stated that if the amount of debt forgiven exceeds $600, the IRS may require it to be reported as forgiven or canceled on a form 1099-C. The plaintiff claims that even if IRS regulations applied to the defendants, the warnings included in the letter do not “correctly state the requirements of a complicated IRS tax statue,” making them misleading to the unsophisticated consumer. Neither company ever reports forgiven debt through the use of IRS form 1099-C, the lawsuit claims.