UPDATED: Judge Certifies Class Action in FDCPA Case

Mickey Lee from Maurice Wutscher has written about a case in which a judge from the Northern District of Indiana has certified a class action against a collection agency that was alleged to have violated the Fair Debt Collection Practices Act by saying in a letter that it “may” report a debt to the credit bureaus and that payment of an offered settlement account would stop collection activity, when in fact the debt had already been reported.

A copy of the order in the case of Erin Johnson v. Enhanced Recovery Company can be accessed by clicking here.

In granting the certification, Judge Philip Simon asserted that the act of receiving a collection letter in the mail where a misleading or false claim may have been made is enough to meet the “injury in fact” requirements under Article III and allow the case to move forward.

Though intangible, the injury is both concrete, because it presents an appreciable risk of harm to the plaintiff, and particularized, because the challenged letter was sent directly to the plaintiff.

The defendant attempted to claim that whether “any statements resulted in a material misstatement that actually affected the recipient’s decision-making is an issue that cannot be proved on a classwide basis.” But Judge Simon ruled that the “question will be not whether any particular plaintiff’s decision-making was influenced by the challenged text of the notice, but whether ‘a significant fraction of the population would be.’ ”

There are nearly 40,000 members of the potential class, according to the plaintiffs.

UPDATE: ERC reached out to AccountsRecovery.net and provided the following information related to this case: We feel it’s important to offer the language which caused the suit, which was: “This letter serves as notification that your delinquent account may be reported to the national credit bureaus”, in combination with the verbiage “Payment of the offered settlement amount will stop collection activity on this matter”. The word “may” is what the plaintiff is zoning in on and claims is confusing as ERC had already reported it. We feel it’s important that the industry know exactly what plaintiffs are zoning in on, in case they use similar language.

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