A District Court judge in Texas has granted preliminary approval of a settlement in a Fair Debt Collection Practices Act class-action lawsuit after a collection agency was accused of sending letters that offered individuals a limited time settlement offer on an unpaid medical debt without disclosing that the statutes of limitation had expired and were no longer legally enforceable.
A copy of the plaintiff’s unopposed motion for preliminary approval of the settlement — which contains the details of settlement — in the case of Monroe v. AssetCare and CF Medical can be accessed by clicking here.
AssetCare is a debt collector that was working accounts placed by CF Medical, a purchaser of defaulted debts.
The settlement will include members of a class and a subclass. The class members include: All natural persons to whom AssetCare LLC mailed a letter between December 31, 2017 and January 21, 2020, which sought to collect a debt on behalf of CF Medical LLC, and offered a settlement of a debt on which the last payment or activity had occurred more than four years prior to the date of the letter without disclosing the debt was no longer legally enforceable. The subclass includes: All persons who meet the foregoing Class definition, but whose letter was mailed between December 31, 2018 and January 21, 2020.
Under the terms of the settlement, the defendants will delete all credit reporting tradelines related to CF Medical for which AssetCare was collecting. As well, CF Medical will waive $41.2 million in unpaid debts owed by members of the class, suppress the filing of 1099-C forms for class members, and never sell, assign, or subject to collection activity any accounts for members of the class. The defendants will also add a disclosure to their collection letters when seeking to collect on time-barred debts. Each subclass member will also be eligible to receive up to $30 in recoveries. The named plaintiff will receive $6,000. Attorneys representing the plaintiffs will receive $100,000.
Judge Lee Rosenthal of the District Court for the Southern District of Texas, Houston Division, preliminarily approved the settlement on Oct. 22 and set a final hearing for March 12, 2021.
The defendant has denied they violated the FDCPA and any liability to the plaintiff or the settlement class.