Complaint Accuses Collector of Collecting on Settled Debt

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A lawsuit has been filed in federal court in New Jersey accusing a collector of violating the Fair Debt Collection Practices Act for leaving a voicemail and then not subsequently sending a written validation notice even though the message appears to have been a limited-content message and for furnishing information to a credit reporting agency without first informing or attempting to inform the plaintiff — all for a debt that had previously been settled with the creditor.

A copy of the complaint, filed in District Court for the District of New Jersey, can be accessed by clicking here.

The plaintiff fell behind on her auto loan payments and was offered a settlement to pay the balance, which she allegedly did. The creditor sent the plaintiff a letter stating that the account had been “settled in full for less than the amount owed” and “has been settled in full.” The creditor even allegedly sent a 1099-C form to the plaintiff for the portion of the debt that was forgiven and the plaintiff reported the amount on her 2020 income tax return.

Then, in April, the plaintiff received a voicemail from the defendant. The voicemail said, “Hi, this is Teresa Hammond. I’m calling from NCB Management Services Incorporated. Please contact me at 844-970-2028, Monday through Thursday 8 a.m. to 8 p.m., Fridays 8 a.m. to 5 p.m. Eastern Time. Thank you.”

For reference, a Limited-Content Message under Regulation F — in which the voicemail is not considered a communication in connection with the collection of a debt — looks like this: “Hi, this is Robin Smith calling from ABC Inc. It is 4:15 p.m. on Wednesday, September 1. Please contact me or any of our representatives at 1-800-555-1212 today until 6:00 p.m. Eastern time, or any weekday from 8:00 a.m. to 6:00 p.m. Eastern time.” Note that the day and time of the call — along with the hours of operation — are optional content that do not need to be included.

According to the complaint, the message was supposed to include a notification that the call was an attempt to collect a debt and was not followed up with a written validation notice.

In May, the plaintiff received notice that the debt was being reported to credit reporting agencies, even though the defendant had allegedly not provided any notice that reporting was going to happen.

The complaint accuses the defendant of violating Sections 1692g(a), 1692e, 1692e(2)(A), 1692e(10), 1692e(8), 1692e(11), and 1692d of the FDCPA.

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