Unfair Debt Collection Class Action Lawsuit Stands Against North Shore

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

A motion to dismiss a class action lawsuit that was filed by North Shore Agency Inc., a debt collection agency accused of unfair debt collection practices, was rejected last week by a Pennsylvania federal judge.

North Shore was hit with the class action lawsuit in October 2013, which alleged the agency formatted collection letters in such a way that required disclosures about people’s rights under federal debt collection laws were overshadowed because they were “contained on the reverse side of the letter amongst other required disclosures.” The lead plaintiff, Denise Harlan, alleged in her complaint that North Shore’s action violated a provision of the Fair Debt Collection Practices Act that requires debt collectors to provide a notice of validation rights—i.e., notice of the consumer’s right to challenge the claimed debt, and how—in certain debt collection communications.

North Shore filed a motion to dismiss the class action lawsuit, arguing that the “entire claim [is] predicated on the format of [North Shore’s] initial notice,” which the agency says is not illegal. ”[The] letter is not misleading to the least sophisticated debtor because: (1) it specifically directs the consumer in all capital letters to the reverse side of the letter to review important information regarding her rights under the FDCPA, (2) the validation notice contained in the letter precisely tracks the language of the FDCPA, and (3) the notice is legible and easily understood,” North Shore argued.

U.S. District Judge Gene E.K. Pratter rejected North Shore’s motion to dismiss the class action lawsuit, finding that the “FDCPA is designed ‘to eliminate abuse debt collection practices.'” The judge continued, “To provide consumers with such ‘adequate notice’ of their rights, [FDCPA] requires the debt collector to notify the consumer that she has a ‘thirty-day period’ to dispute ‘the debt, or any portion thereof,’ in writing,” and “commands that ‘[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.'”

“Whether or not the letter’s formatting—the small text of the notice, its placement on the back, and the relatively small and less (if not in-) conspicuous advisement to see the reverse side of the letter—alone violates [the FDCPA], Ms. Harlan’s Complaint states a claim for violation of [the FDCPA] based on the misleading inconsistencies created by the letter’s substance and form: the content of the front of the letter—especially when combined with the small form of the notice of validation rights and the reference thereto—is overshadowed by the content of North Shore’s messages on the front of the letter,” the judge continued. “In other words, as Ms. Harlan has pleaded in her Complaint, the required notice of validation rights ‘is overshadowed by other language in the letter, in violation of [the FDCPA]’s requirement.'”

Judge Pratter explained, “More explicit regulation — if not by legislators reacting to a parade of horribles, then perhaps by professionals more experienced in the field of debt collection — could reduce the demand that FDCPA litigation involve mind-reading the ‘least sophisticated debtor’ (or Congress).”

Lead plaintiff Denise Harland is represented by Cary Flitter and Andrew Milz of Flitter Lorenz PC.

The North Shore Unfair Debt Collection Class Action Lawsuit is Harlan v. Transworld Systems Inc., d/b/a North Shore Agency Inc., Case No. 2:13-cv-05882, in the U.S. District Court for the Eastern District of Pennsylvania.