As a third-party debt collector, Midland Credit Management, Inc. (MCM) must comply with the Fair Debt Collection Practices Act (FDCPA), a federal law. One thing the law requires is clarity in communications with consumers, so that ordinary people can fully understand their options and make the best choices possible in their circumstances. The complaint for this class action alleges that MCM sends collection letters with settlement offers that are ambiguous and may mislead consumers about what’s being offered.
The class for this action is
- All individuals with addresses in New York
- To whom Midland Credit Management sent an initial collection letter in an effort to collect a consumer debt
- That contained deceptively-worded settlement offers,
- Which was sent between November 12, 2020 and December 3, 2021.
The plaintiff for this class action, Joseph Pollak, allegedly incurred a debt to Synchrony Bank, via credit card charges that were primarily for personal, family, or household purposes. At some point, that alleged debt appears to have been sold or transferred to MCM for collection.
MCM’s initial approach to Pollak was a collection letter dated September 29, 2021. A copy of the letter was attached to the complaint as Exhibit A when it was filed.
That letter states the amount owed as $3,077.68 and offers Pollak three options for settling the debt. The complaint sets them forth as follows:
“1) 10% Off – Pay 1 payment of $2,769.91.
“2) 5% Off – Pay 6 monthly payments of $487.30.
“3) Pay $50 per month – Payments as low as $50 per month.”
It’s the third option that the complaint calls out. According to the complaint, the offer is not fully explained and allows for two different interpretations. First, it says, the option could be construed as paying a discounted amount in monthly installments of $50. Alternatively, it could be construed as paying monthly installments of $50 until the full amount of the debt is paid off.
Also, the complaint alleges, if the second meaning is the correct one, then “the letter is deceptive because it describes all three options as ‘options designed to save you money.’ If the debt is being paid in full under Option 3, it is not a discount program” and the consumer is not saving money by agreeing to it.
The complaint contends, “By failing to explain whether Option 3 is a settlement option or a full pay option, the Letter is false, deceptive and misleading.”
MCM violated the FDCPA, the complaint claims, because the third option in the letter “is open to more than one reasonable interpretation, at least one of which is inaccurate…”
Article Type: LawsuitTopic: Loans
Most Recent Case Event
Midland Credit Letter Unclear as to Settlement Options FDCPA Complaint
November 12, 2021
As a third-party debt collector, Midland Credit Management, Inc. (MCM) must comply with the Fair Debt Collection Practices Act (FDCPA), a federal law. One thing the law requires is clarity in communications with consumers, so that ordinary people can fully understand their options and make the best choices possible in their circumstances. The complaint for this class action alleges that MCM sends collection letters with settlement offers that are ambiguous and may mislead consumers about what’s being offered.
Midland Credit Letter Unclear as to Settlement Options FDCPA ComplaintCase Event History
Midland Credit Letter Unclear as to Settlement Options FDCPA Complaint
November 12, 2021
As a third-party debt collector, Midland Credit Management, Inc. (MCM) must comply with the Fair Debt Collection Practices Act (FDCPA), a federal law. One thing the law requires is clarity in communications with consumers, so that ordinary people can fully understand their options and make the best choices possible in their circumstances. The complaint for this class action alleges that MCM sends collection letters with settlement offers that are ambiguous and may mislead consumers about what’s being offered.
Midland Credit Letter Unclear as to Settlement Options FDCPA Complaint