Class-Action Suit Filed Against Collection Agency For ‘Aggressive’ Collections

A class-action lawsuit has been filed against GC Services, alleging the company is being too aggressive in collecting unpaid tax debts on behalf of the state of Michigan.

Collection letters being sent by the company are not clear enough that they are coming from a private collection agency and not the state of Michigan itself, according to the plaintiff’s attorney who filed the suit.

The letters include the seal for the state of Michigan, a state of Michigan email address, and a physical address in Lansing, Mich., the capital for the state. The letters also fail to notify individuals they can dispute the debt or request validation of the debt, according to a published report.

“The letters are certainly some of the worst letters that I’ve seen in 35 years of doing this kind of work,” said Lawrence Friedman, who filed the suit.

In reporting news about the lawsuit, the news outlet acknowledged that GC Services has made $100 million in commissions while collecting more than $1 billion on behalf of the state. There are about 2 million Michigan residents who are behind on their taxes, according to the report.

The state’s Treasury office did not specifically respond to requests from the outlet regarding the suit, other than to say that GC Services “was awarded the contract after meeting or exceeding criteria established in the state competitive bid process.”