An Oregon woman today filed a class-action lawsuit against Todd, Bremer & Lawson, a South Carolina collection law firm, for allegedly violating the Fair Debt Collection Practices Act and state law in Oregon by trying to charge a 25% fee on top of the unpaid balance.
A copy of the complaint can be found here.
Back in 2014, Tara Bowman had a balance of $15,102.87 with Portland State University. The school sent the account to its collection agency, Todd, Bremer & Lawson, and the agency mailed Bowman a letter in July 2016. The letter included a breakdown of the balance, which was now $18,878.59 and included $3,775.72 in “fees.” The $3,775.72 represented 25% of the unpaid principal and interest. Bowman ignored the letter. A second letter was sent in February 2017. The balance was now $20,110.44, but did not include a breakdown like the first email.
“Because she did not feel safe” contacting the collection agency, according to the complaint, Bowman contacted the school, which contacted the agency. The agency then sent an itemized bill. This time, the breakdown included an “Agency Fee” of $4,034.88, which represented 25% of the unpaid principal and interest (which had continued to accrue while the debt was not paid).
State law in Oregon allows for a private collection agency to work on behalf of a public body — the university, in this case — and the public body may add a reasonable fee to the amount of the debt, payable by the debtor, to compensate the public body, in whole or in part, for the collection agency fee incurred or to be incurred.
The complaint argues that the 25% fee is not reasonable and since it is not being paid to the university, is not allowed. The letters sent to Bowman by the collection agency are also alleged to contain false, misleading, and deceptive statements, which violates the FDCPA, if true.
Bowman is seeking to include any other PSU student that received similar collection letters from the law firm.