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Plaintiff Files Class Action Lawsuit Over Interest Language in Collection Letter

A collection agency in Minnesota is facing a potential class-action lawsuit because it indicated that interest may be charged on an unpaid debt.

The agency, Reliance Recoveries, sent a collection letter attempting to recover a $245.54 unpaid medical bill. The letter said “Interest may be charged at 6% per annum on the past due balance.”

A copy of the complaint can be viewed here.

The plaintiff alleges that nowhere in the letter does it indicate whether, in fact, interest is being charged, and if it is being charged, whether the amount is included in the unpaid balance or separate from the unpaid balance.

Such vague language is deceptive to the least sophisticated consumer and therefore violates the Fair Debt Collection Practices Act, the plaintiff alleged. Because about 40 of these letters were sent out, the plaintiff is seeking to have the suit certified as a class action.

 

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