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Class Action Suit Filed Against Agency For Indicating Settlement May Impact Future Credit Availability From Lender

A class-action lawsuit has been filed against a collection agency, accusing it of violating the Fair Debt Collection Practices Act for indicating in a letter that the individual may be offered less favorable credit terms in the future from the original creditor if the debt was settled for less than the full balance.

A copy of the complaint in the case of Sprei v. United Collection Bureau can be accessed by clicking here.

The plaintiff received a collection letter from the defendant that included the following passage:

“If we settle this debt with you for less than the full outstanding balance, Chase may offer you less favorable terms in the future for some Chase products or services, or may deny your application.”

The suit seeks to include any individual who received a similar letter from the defendant who lives in the state of New York.

In filing the suit, the plaintiff is accusing the defendant of violating Sections 1692e, 1692e(10), 1692e(2)(A), and 1692f, which prohibit collectors from making false or misleading statements or otherwise engaging in unconscionable or unfair means when attempting to collect on a debt.

A letter may confuse the least sophisticated consumer when “it can be reasonably read to have two or more different meanings, one of which is inaccurate,” according to a precedent cited in the complaint. As well, the complaint sites a bulletin from the Bureau of Consumer Financial Protection that says a collector may be acting deceptively when implying that an individual’s creditworthiness may be improved or “the likelihood that a consumer will subsequently receive credit from a lender” could be enhanced when paying debts.

 

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