Alltran Financial Late Charges May Up Debt FDCPA Class Action

The Fair Debt Collection Practices Act (FDCPA) tries to ensure that consumer debtors have accurate and complete information about what they owe and other things, so that they can make the best decisions possible about their finances. The complaint alleges that Alltran Financial, LP sent consumer debtors a confusing or misleading collection letter in that it made reference to “late and other charges” that the complaint says do not apply.

Plaintiff Araceli Cervantes allegedly incurred a debt, for personal, family, or household purposes. The debt owed to a Citibank, NA consumer credit account. At some point, Cervates allegedly stopped paying the debt, sending the debt into default.

At some point, it appears that Citibank engaged Alltran to collect the debt. Alltran sent Cervantes a letter dated August 11, 2020 for that purpose.

The letter contained a paragraph that the complaint raises objections to: “As of the date of this letter, you owe the amount stated above. Because your account continues to accrue interest and may accrue late and other charges on all owed balances pursuant to your agreement with your creditor, the Total Balance on the date you pay may be greater. If you pay the Total Balance above, an adjustment may be necessary after we receive your payment.”

The complaint alleges that the statement about late charges “was a false statement.” Why? Because, it says, “late charges were never going to be assessed on the Account as the Account had already been accelerated.

Referring to an earlier court case, the complaint says, “Once a debt is accelerated, there are no longer periodic payments due and owing, and therefore no available late charges for being late on a periodic payment.”

The complaint then quotes the FDCPA as saying, “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” This includes a “threat to take any action that cannot legally be taken or that is not intended to be taken…” or “[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer…”

In addition, “A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt…”

The class for this action is

• All persons similarly situated in Illinois,
• From whom Alltran tried to collect a delinquent Citibank debt,
• By mailing a letter substantially similar to Exhibit A filed with this complaint,
• Which states that “because of interest, late charges, and other charges that my vary from day to day, the amount due on the day you pay may be greater”
• When late charges could not legally be assessed,
• Which letter was sent between June 24, 2020 and June 24, 2021.

Article Type: Lawsuit
Topic: Loans
Tags: False or Misleading Information, Misleading or Confusing Debt Collection Letter, Unlawful Debt Collection