Misleading Debt Collection Letter Spurs New York FDCPA Lawsuit

A New York woman has filed a class action lawsuit against GC Services Limited Partnership, which allegedly sent her and numerous other consumers an allegedly misleading debt collection letter. The woman states this letter was sent on behalf of Citibank, attempting to collect a debt she allegedly incurred through a Sears charge account.

The woman is filing this New York FDCPA lawsuit, alleging the misleading debt collection letter was deliberately designed to confuse and intimidate consumers into paying debts without confirming whether or not the debts were valid.

Plaintiff Wanda Diaz has filed this New York FDCPA lawsuit and is seeking to represent an entire consumer Class of New York residents who received the same kind of allegedly misleading debt collection letter. She says letter like these may intimidate debtors into quick action that does not allow them to confirm whether or not state and federal debt collection regulations protect them.

According to the New York FDCPA lawsuit, Diaz received misleading debt collection letter on May 31, 2017, for a balance of $2,030.90. She claims the misleading debt collection letter contained a barrage of confusing language, which provided several options to pay off the debt, including:

“We’d like to let you know that our client, Citibank, N.A., has authorized us to make you a settlement offer on your account. If you pay 75% of the New Balance, our client will consider your account settled.”

The letter also stated that this offer was an “excellent opportunity” and that they could either mail or call to pay $1,523.18. However, the debt collection letter also stated that “the exact amount stated in this letter” must be sent “no later than 14 days from the date of the letter” or the offer would be voided.

The debt collection letter further stated that Citibank was not “obligated to renew the offer”, and that Citibank could “report a discharge of indebtedness if required by applicable tax law.” On the same note, the misleading debt collection letter stated reporting this could have tax consequences for Diaz.

Overview of Debt Collection Policies

Each of these points is a violation of New York debt collection laws as well as the Fair Debt Collection Practices Act (FDCPA). New York has some of the strongest debt collection policies in the country, with additional laws enacted in 2015 revolving around the statute of limitation disclosures and debt validation.

Other policies included account specific disclosures, general collection, and use of email communication. New York state law requires debt collectors to inform residents of whether or not the debt expired and to provide proof the debt belongs to the consumer being contacted about the issue.

The FDCPA has similar requirements but also prohibits debt collectors from using harassment and intimidation tactics to collect debts. This includes threatening to contact third parties or authority figures about the debt and pursuing legal action.

In addition, sending a misleading debt collection letter containing language designed to confuse consumers is also illegal. Debt collectors found to be in violation of these laws could face penalties up to $1,000 per FDCPA violation, which can quickly add up to financial damages.

Diaz is filing this New York FDCPA lawsuit on behalf of herself and others similarly situated and is seeking damages for all FDCPA violations.

The Misleading Debt  Collection Letter Lawsuit is Wanda Diaz v. GC Services Limited Partnership, Case No. 1:18-cv-00886, in the U.S. District Court for the Eastern District of New York.

Join a Free New York Unfair Debt Collection Class Action Lawsuit Investigation

If you live in New York and a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.