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Midland Credit Management Deceptive Debt Collection Letter Class Action

Plaintiff Sky Shadow is alleged to owe $1,878.90 in a debt originating with Chase Bank USA, but when Midland Credit Management (MCM) tried to collect that debt, the complaint for this class action alleges, it did so in ways that violated the Fair Debt Collection Practices Act (FDCPA) as well as California’s Rosenthal Act.

The class for this action is all consumers living in California who, between November 8, 2016 and November 8, 2017 received letters or debt collection notices from Midland Credit Management similar to the ones in this case in violation of the FDCPA.

The letter was dated November 30, 2016, and the complaint quotes it as saying that “mistakes can happen to anyone” and as offering three options for paying the debt, (1) paying it by December 30, 2016 for 40% off, (2) paying it off over six months with 20% off, and (3) paying it in “monthly payments as low as $50 a month.”

In the last line of the letter, in much smaller print, was the following statement: “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, we may continue to report it to the credit reporting agencies as unpaid.”

What the letter does not say is that if Shadow made even a single, partial payment on the debt, it might revive the statute of limitations and allow MCM to sue her again for the full amount. The complaint claims that not telling Shadow that payments could leave her worse off renders the letter misleading, confusing, deceptive, and unfair, as it “misrepresents the nature, character and/or legal status” of the alleged debt, something that is forbidden by the FDCPA. It implies, the complaint alleges, that she could make payments risk-free and not suffer consequences if she was not able to continue the payments to the end. This is not true; under California law, MCM would then have another four years in which it could sue her for the debt.

The Federal Trade Commission, the Consumer Financial Protection Bureau, and other agencies require that when a company collects on a time-barred debt (that is, a debt that is old enough that the debtor cannot be sued for it), the debt collector must tell the debtor “that (1) the collector cannot sue to collect the debt, and (2) providing a partial payment would revive the collector’s ability to sue to collect the balance.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Midland Credit Management Deceptive Debt Collection Letter Complaint

November 8, 2017

Plaintiff Sky Shadow is alleged to owe $1,878.90 in a debt originating with Chase Bank USA, but when Midland Credit Management (MCM) tried to collect that debt, the complaint for this class action alleges, it did so in ways that violated the Fair Debt Collection Practices Act (FDCPA) as well as California’s Rosenthal Act. The letter offered various payment plans and admitted that the debt was time-barred and she could not be sued for it; but what it did not say was that if Shadow made even a single, partial payment on the debt, it might revive the statute of limitations and allow MCM to sue her again for the full amount.

midland_credit_collection_letter_complaint.pdf

Case Event History

Midland Credit Management Deceptive Debt Collection Letter Complaint

November 8, 2017

Plaintiff Sky Shadow is alleged to owe $1,878.90 in a debt originating with Chase Bank USA, but when Midland Credit Management (MCM) tried to collect that debt, the complaint for this class action alleges, it did so in ways that violated the Fair Debt Collection Practices Act (FDCPA) as well as California’s Rosenthal Act. The letter offered various payment plans and admitted that the debt was time-barred and she could not be sued for it; but what it did not say was that if Shadow made even a single, partial payment on the debt, it might revive the statute of limitations and allow MCM to sue her again for the full amount.

midland_credit_collection_letter_complaint.pdf
Tags: FDCPA, Misleading or Confusing Debt Collection Letter